Ethereum Outlook: Traders Withdraw from ETH Derivative Platforms – What Comes Next?
Ethereum is currently facing downward pressure, as indicated by the daily chart. Despite stability in the last day, ETH has experienced a 9% decline over the past week of trading. Notably, there has been a significant decrease in trading volume in recent days.
Traders, however, maintain a positive outlook, anticipating a potential turnaround in prices and a surge upwards to surpass immediate local resistances. Concurrently, on-chain data highlights other developments that derivative traders should pay close attention to.
Recent data reveals that over 40,000 ETH have been transferred from derivative exchanges, such as Binance and OKX, according to an analyst citing CryptoQuant data. This movement of funds from derivatives to spot exchanges may suggest caution among traders, waiting for clearer market conditions before committing. Nevertheless, the shift from derivatives to spot exchanges is viewed positively, indicating an increase in inflows to spot exchanges.
Increased deposits into spot exchanges, especially from derivatives exchanges rather than external non-custodial wallets, can alleviate speculative pressure and provide support for prices. The trend of outflows from derivative exchanges signifies a reduction in traders willing to take leveraged positions on crypto prices, whether short or long.
The direction of prices in the upcoming trading sessions will be crucial, with a potential drop below $2,100 and August lows triggering a sell-off. This scenario could prompt leveraged traders to adopt a preservation strategy, moving their assets to spot exchanges and potentially into stablecoins.
Conversely, a reversal above $2,800 could boost sentiment and pave the way for further upward movement towards $3,000 and $3,500. This positive price action would likely increase confidence among traders, leading to more borrowing of ETH from exchanges to fund leveraged positions.
Despite these potential price movements, Ethereum is facing challenges such as declining gas fees, which could impact demand negatively. The network’s long-term sustainability is being questioned due to this trend. Additionally, institutional demand for Ethereum through spot ETFs is on the decline, with net outflows from US spot Ethereum ETFs surpassing $568 million.
In conclusion, Ethereum’s price trajectory in the near future remains uncertain, with various factors influencing market sentiment and trader behavior. Monitoring developments in trading volumes, on-chain data, and institutional demand will be essential in gauging Ethereum’s future price movements.
