On-chain data indicates that Ethereum's exchange net flows have recently been highly positive, suggesting potential selling activity in the market.

Ethereum Exchange Netflows Have Increased Recently

CryptoQuant head of research Julio Moreno discussed this trend in a new post on X. The "exchange netflow" metric tracks the net amount of ETH moving into or out of centralized exchange wallets.

A positive netflow indicates that more coins are being deposited into exchanges than withdrawn, often signifying potential selling pressure, which could negatively impact Ethereum's price. Conversely, a negative netflow suggests that coins are being withdrawn from exchanges, indicating long-term holding intentions and a potentially bullish trend for the cryptocurrency.

The chart below shows the recent trend in Ethereum exchange netflows:

The graph reveals significant positive spikes in Ethereum netflows recently, similar to levels last seen in March. Moreno notes that most of these deposits have been directed to Binance and Bybit.

While positive netflows can suggest selling, they can also reflect other activities like using exchange services for derivatives trading. Nonetheless, large deposits typically lead to increased volatility. The chart shows that during the rally peak in March, high netflows were associated with profit-taking by investors.

Recently, Ethereum experienced a sharp price surge driven by positive news about spot exchange-traded funds (ETFs). This surge may have prompted profit-taking, as indicated by the positive netflows.

Despite this, Ethereum's price has remained relatively high, avoiding a significant selloff. However, it's uncertain how long demand can sustain the potential selling pressure if deposits continue to flow into exchanges.

ETH Price

Ethereum saw a brief price increase, surpassing $3,950, before quickly falling back below the $3,800 mark.