Ethereum Exchange Inflows Surge Signals A Profit Taking

Ethereum recently experienced a bullish movement causing its price to soar by nearly 25%. Notably, the price of ETH was observed to have surged following the bullish trend in the Ethereum trading exchange. ETH price spiked from $1,300 to $1,585, hitting strong resistance at the $1,600 upward trajectory.

There has been a buzz of withdrawal activity as active addresses notably dropped, signalling a weakened momentum in the price chart. The downturn of active addresses signals a drawback of whales (crypto wallets that hold at least one million shares of a particular crypto asset).

This isn’t a good occurrence for Ethereum, as the bears are gradually taking over. These Ethereum whale addresses, which were more than 10,000 earlier this month, have significantly reduced to 1,158 addresses, a 7-month low.

Reasons For ETH’s Price Spike 

Observations following the occurrence are that whales took advantage of the recent pump in price to make withdrawals which have affected the price action by strengthening the support zones and weakening the resistance.

The recent buzz in activities is seen as a deliberate plan of the whales to secure their funds by altering the price action to strengthen the support zones. Thus, causing a spike. Then, they can immediately sell off their holdings.

As mentioned earlier, the number of addresses in profit owing to the ETH price action increased, marking another increase of up to 57% in October. Interestingly, this could be an advantage for traders as they are encouraged to purchase more coins.

The volatility of the market also can be traced to the high trajectory move of the Ethereum NVT Signal (7-day MA), which also hit a 1-month high of 1,604.988. The rapid growth on the NVT signal shows the activities of investors’ pricing at premium zones which often coincides with local market peaks.

At the moment, ETH was exchanging hands at $1,585. A possible explanation for the surge leading to the bullish breakout is the knock-on effect of the rise in the number of Ether transactions on centralized exchanges observed after the cryptocurrency’s breakout.

Ethereum price action seems to be experiencing fluctuations as the market remains volatile, but technical analysts indicate that the bears can push ETH’s price toward the $1,600 level.