The net exchange of Ether (ETH) over the past two years highlights a pattern of behavior among ether whales that market analysts believe is injecting the price of the second largest cryptocurrency.
“Net Exchange Flow” is an indicator that measures the net amount of cryptocurrencies entering or leaving the wallets of all central exchanges. The scale value is calculated by taking the difference between the input and the exchange.
Data shared by a pseudonymous trader at CryptoQuant indicates that ETH whales are constantly sending their holdings to exchanges to increase the price of ETH and sell them at a higher market price.
Net ether exchange data confirms the behavioral pattern among Ethereum whales and indicates that it has been going on since 2020. The price pump often follows whales selling their holdings at a high market price, the same that precedes the correction, as shown in the lower graph.
ETH price movement against the internal exchange flow. Source: CryptoQuant
The pattern of behavior comes as a surprise given that the positive net outflow or the high number of deposits on central exchanges is often seen as a bearish signal, with traders mostly sending their holdings to the exchanges for selling.
In his analysis, the trader noted that exchange deposits periodically increased during the short-term or long-term declines in the asset. The network flow chart confirms that the increase in currency flows often occurred at a time when the price of ETH was trading at low levels.
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The heavy occurrences of ether whales on exchanges continued even in the run-up to the merger as the price of ETH rose ahead of the big Proof of Stake transition. The price fell after the merger, although many market experts predicted that it would work differently, confirming the behavior pattern associated with ether exchange instances. However, the trader concluded that the exchange flow does not necessarily rise before the price of Ether rises.