Ethereum Exchange Inflow Soars, Hinting at Spike in Profit-Taking

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Ethereum has been one of the most consistent gainers for over 10 days now, surging more than 25%. With the bullish momentum weakening, how can ETH price action pan out?

ETH price was subject to Ethereum bulls, who did a pretty good job at bringing prices from the $1,300 level to $1,585. Even though Ethereum price charted quite a run, the $1,600 resistance halted the upward trajectory

Ethereum Inflows Soar 

There are many reasons behind ETH weakening price momentum.

Firstly, the active Ethereum addresses have seen a continued decline, making lower lows on a daily chart after spiking on Oct. 10. 

ETH Active Addresses | Source: Sanbase

Declining active addresses present waning market confidence from participants. That said, another worrying trend is that the number of Ethereum addresses holding 10,000+ ETH just reached a 7-month low of 1,158 addresses. 

This could mean that whale entities have been taking profits during the recent pump and reduced their holding as Ethereum price action weakened. 

Ethereum price Source: Glassnode Alerts
Source: Glassnode Alerts 

Furthermore, data from CryptoQuant suggests that whales’ deposits on the exchange caused prices to rise. Interestingly, exchange inflow (mean) saw a massive rise as Ethereum prices saw a pump. 

Ethereum price Exchange Inflow (mean) | Source: Crypto Quant
Exchange Inflow (mean) | Source: Crypto Quant

The recent upswing can be thought of as a deliberate pumping event from the bear market, which could act as an exit move before a bigger fall. 

Local ETH Price Top Reached?

On Oct. 31, as another month came to an end, ETH percent of addresses in profit (7d MA) reached a 1-month high of 56.565%. With so many addresses in profit, traders could be encouraged to book some profits in the crypto market. 

Ethereum price Source: Glassnode Alerts
Source: Glassnode Alerts 

That said, Ethereum NVT Signal (7d MA) also reached a 1-month high of 1,604.988. While a high NVT Signal indicates that investors are pricing the asset at a premium, it often coincides with local market tops. 

In the case of NVT making higher highs during bearish over-extensions, the same could mean that selling opportunities arise during peak euphoria. 

At press time, ETH price traded at $1,585. IntoTheBlock’s In/Out of Money Indicator suggests that a fall below $1,560, where 1.17 million addresses hold 5.38 million ETH, can lead to some more sell-offs. 

Source: IntoTheBlock 
Source: IntoTheBlock 

Ethereum price action seems at crucial crossroads, but invalidation of the bearish thesis can push ETH price to the bullish target of $1,600. 

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