Bitrabo Editorial
Ethereum is currently experiencing some challenges in the market, as seen in its daily chart patterns. Although ETH has remained steady over the past day, it has decreased by 9% over the last week. Additionally, there has been a significant decline in trading volume in recent days.
Despite these issues, many traders stay optimistic, believing there will be a turnaround in prices that will surpass local resistance levels. However, some on-chain metrics present factors that traders should keep an eye on.
More Than 40,000 ETH Withdrawn from Derivative Exchanges
One analyst, referencing data from CryptoQuant, notes a considerable outflow of Ethereum from derivative exchanges in recent weeks. Specifically, over 40,000 ETH has been transferred away from trading platforms such as Binance and OKX.
From a trading perspective, a surge in outflows from derivatives to spot exchanges can indicate that traders are exercising caution, opting to wait for clearer signals before taking action. Nonetheless, this trend is generally favorable, as it suggests more ETH is being moved to spot exchanges.
Increased deposits to spot exchanges, particularly those sourced from derivatives, help mitigate speculative pressures and support prices. As withdrawals from derivative platforms rise, it indicates a waning interest amongst traders in engaging in leveraged trades, whether short or long.
Looking ahead, how Ethereum’s price behaves in the upcoming sessions will be crucial. If it drops below $2,100 and revisits August’s lows, it could trigger a sell-off, pushing leveraged traders to adopt a conservative approach, moving their coins to spot exchanges, and potentially to stablecoins thereafter.
On the other hand, if the price reverses above $2,800, it could boost trader morale, establishing a stronger foundation for a climb to $3,000 and $3,500. This would likely result in heightened confidence, prompting more traders to borrow ETH from exchanges to engage in leveraged trading.
Declining Ethereum Gas Fees and Institutional Interest
Ethereum faces ongoing challenges, including declining gas fees, which some analysts believe may hinder demand and raise concerns about the network’s long-term viability.
As of September 9, the average gas fee for Ethereum was reported at 2.862 gwei, a stark contrast to the 14.21 gwei recorded a year earlier, based on data from YCharts.
Moreover, there has been a decline in institutional demand for Ethereum through spot ETFs, with net outflows from all U.S. spot Ethereum ETFs surpassing $568 million, according to SosoValue.