Key Points
- Ethereum’s selling pressure may be easing, as indicated by exchange data.
- Despite this, Ethereum’s recovery is hindered by a decline in demand.
Ethereum’s performance this year has been underwhelming compared to Bitcoin. This has been largely due to a decrease in demand coupled with an increase in selling activity.
Reduced Selling Pressure
However, the selling pressure may be nearing its end. CryptoQuant’s Quicktake post revealed that the ETH netflow on derivative exchanges exceeded 40,000 ETH on September 7th. This suggests a decrease in selling pressure, with traders showing less interest in borrowing to open short selling positions.
Spot Market Selling Continues
Despite these indications from the derivatives market, the spot market has not shown the same trend. The Ethereum Foundation has continued to sell ETH, recently trading 450 ETH for $1M worth of DAI per SpotOnChain. Over the last four days, the organization has sold $1.28M worth of ETH tokens.
Metalpha, a crypto wealth management firm based in Hong Kong, has also deposited over $54M worth of ETH to Binance in the last three days. However, the amount of ETH being deposited on spot exchanges is decreasing. On September 8th, ETH’s exchange inflows were at 37,415 ETH, the lowest since late July. This suggests that while sellers are still active, the selling momentum might be slowing down.
ETH was trading at $2,319 at the time of writing, showing a minor 0.6% increase in 24 hours. The altcoin was trading within a descending channel on the one-day chart, while the Awesome Oscillator was negative, indicating that bears remained in control.
Despite this, ETH is attempting a breakout to the upside after forming three green consecutive candles. If a breakout occurs, it could indicate a shift in momentum and the start of a rally. However, for this to happen, buyers need to outnumber sellers. At the time of writing, the Relative Strength Index (RSI) was at 37, suggesting that ETH is in bearish territory.
The RSI line’s movement indicates that seller exhaustion may be occurring as it attempts to crossover above the signal line. If this crossover is confirmed, it will indicate a buy signal. Despite the bearish sentiment, Ethereum’s Funding Rates have turned positive, showing optimism among futures traders.
