Key Points
- Ethereum’s price correction has not deterred significant outflows from exchanges, indicating active engagement on the network.
- Long-term holders continue to hold their positions despite the price volatility and potential macroeconomic challenges.
Despite recent price volatility, Ethereum (ETH) has witnessed substantial outflows from exchanges.
The outflows, amounting to approximately 1,000,000 ETH or $3.41 billion, have persisted since March. This trend continues despite potential macroeconomic hurdles and concerns over a possible rejection of a spot ETH ETF by the SEC.
Active Engagement Despite Unfavorable Conditions
These outflows suggest that individuals are actively participating in real activities on the Ethereum network, such as transaction payments, staking, and restaking. It indicates that they are confident in holding ETH, even in adverse market conditions, instead of merely engaging in speculative trading.
At the time of writing, ETH was trading at $3,254.80, down by 2.68% over the last 24 hours. The swift decline in ETH’s price led to many traders’ positions being liquidated. According to data from Coinglass, $57.22 million worth of positions were liquidated over this period, including approximately $41 million worth of long positions.
Trading Velocity and Network Growth Decline
The rate at which ETH was being traded has also decreased significantly in recent days. Furthermore, the network growth of ETH has slowed down considerably, suggesting that new addresses are losing interest in ETH.
This lack of interest from new addresses could impact the buying pressure for ETH in the future and may affect its ability to recover to the $3,500-level.
Due to the price correction, ETH’s MVRV ratio fell significantly, suggesting that most ETH holders were not profitable at the time of writing. This could be seen positively as these holders don’t have any incentive to sell their holdings and the price of ETH could maintain its current levels.
The Long/Short difference for ETH also spiked over the last few weeks, indicating that long-term holders outnumber short-term holders. These long-term holders are less likely to sell their holdings and don’t tend to react impulsively to price fluctuations.
