The post Ethereum Volatility Soon? Derivatives Exchanges Receive 82,000 ETH In Deposits appeared on BitcoinEthereumNews.com.

On-chain data shows derivatives exchanges have just received large Ethereum deposits, something that could lead to volatility in ETH’s price. Ethereum Exchange Netflow Has Seen A Sharp Positive Spike Recently As explained by an analyst in a CryptoQuant Quicktake post, the Exchange Netflow for ETH has registered a large spike recently. The “Exchange Netflow” here refers to an on-chain indicator that keeps track of the net amount of ETH moving into or out of the wallets associated with centralized exchanges. When the value of this metric is positive, it means the investors are depositing a net number of tokens to these platforms. How these transactions affect ETH depends on the exchange to which the holders are moving coins. In the case of spot exchanges, investors usually make deposits whenever they want to sell, so positive exchange netflows to platforms of this type can lead to a bearish outcome. For derivatives exchanges, which are relevant platforms in the current discussion, the relationship with the price doesn’t tend to be so simple. Holders transfer their coins to these exchanges to open up fresh positions on the derivatives market. As new positions generally accompany some leverage, the overall risk in the sector could be assumed to go up when investors deposit to derivatives exchanges. This can lead to more volatility for the ETH price. A negative Exchange Netflow is usually bullish no matter the platforms involved, as it implies the investors are moving their coins to self-custodial wallets, potentially because they plan to hold into the long term. Now, here is a chart that shows the trend in the Ethereum Exchange Netflow for the derivatives platforms over the last few weeks: As displayed in the above graph, the Ethereum Exchange Netflow has seen a large spike into positive territory recently, which suggests the…

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Filed under: News - @ November 6, 2024 10:25 am