Ethereum volatility soon? Derivatives Exchange Receives 82,000 ETH as Deposit
On-chain data shows that the derivatives exchange has just received a large Ethereum deposit, which could lead to volatility in the price of ETH.
Ethereum Exchange Netflow has recently seen a rapid rise.
As explained by the analyst in the CryptoQuant Quicktake post, Exchange Netflow for ETH has recently seen a significant surge. “Exchange Netflow” here means an on-chain indicator that tracks the net amount of ETH flowing into or out of wallets associated with a centralized exchange.
If the value of this indicator is positive, it means that the investor deposits the net token on the platform. The impact of these transactions on ETH depends on the exchange where the holder moves the coin.
In the case of spot exchanges, investors generally make deposits whenever they want to sell, so the positive exchanges on this type of platform can lead to weak results.
In the case of derivatives exchanges, which are currently being discussed, the relationship with the price tends to be very simple. The holder transfers his coin to these exchanges to open a new position in the derivative market.
The new position is generally accompanied by some leverage, which can be assumed that the overall risk of the sector will increase when an investor deposits it on the derivative exchange. This can increase the volatility of the ETH price.
Negative Exchange Netflow is generally optimistic, regardless of the relevant platform. This means that the coin is being moved to its own wallet because investors plan to possess in the long run.
The charts of the Ethereum Exchange Netflow for the derivative platform over the last few weeks are as follows.
As shown in the graph above, Ethereum Exchange Netflow has recently surged in a positive area, which means that investors have made large net payments to the derivative platform.
The holders transferred about 82,000 ETH to the exchange through this net inflow. As mentioned earlier, this trend can increase the volatility of ETH.
It is difficult to say which direction a new volatility can bring cryptocurrency in the last few months because other positive soaring has been mixed.
However, given the recent surge in Ethereum prices, many of them can be a short position that predicts further falls. If so, if you switch to the rise, these positions can be liquidated, which can add fuel to the rally.
ETH price
At the time of this article, Ethereum is trading at about $ 2,400, down almost 7% from last week.
