by On-chain activity shows a noteworthy response to regulatory uncertainty surrounding the second-largest digital asset by market capitalization, Ethereum.
There has been a significant increase in the number of tokens sent to centralized cryptocurrency exchanges. This is the highest value ever recorded since September 2022, having a profound impact on Ethereum's price.
Ethereum sees the highest inflow of exchanges in 2 years
Ethereum has recently come under significant scrutiny. Critics of the cryptocurrency community cite Solana's poor price performance and rise in popularity as evidence of Ethereum's declining influence. Moreover, regulators are allegedly targeting the Ethereum Foundation by questioning ETH's classification as a security.
Indeed, concerns have intensified with reports emerging about U.S. Securities and Exchange Commission (SEC) investigations into Ethereum-related entities. According to IntoTheBlock, the resulting negative sentiment led to the transfer of over $720 million in ETH to centralized exchanges last week.
In particular, SpotOnchain identified three significant long-term ETH investors who deposited 32,527 ETH worth approximately $109 million on centralized platforms in the last 24 hours. Specifically, these investors transferred 12,500, 11,600, and 8,427 ETH to Kraken and Binance.
“Three long-term ETH investors/funds deposited 32,527 ETH ($109 million) on CEX in the last 24 hours. Did the whales think the recent correction was still not enough?” – SpotOnChain wondered.
When funds move to stock exchanges, it is usually seen as a bearish signal for the market. This means that the holder is ready to sell his assets. As a result, Ethereum saw a significant drop in price.
According to BeInCrypto data, the price of ETH has dropped by 10% over the past week, reaching $3,371 at the time of reporting.
Lucas Outumouro, director of research at IntoTheBlock, highlighted ETH's underperformance compared to Bitcoin and even the S&P 500. However, he emphasized the enduring strength of Ethereum's fundamentals, which continue to reassure long-term holders.
“Overall, after undergoing a major upgrade, ETH holders remain optimistic. Despite recent difficulties, the data confirms continued development of Ethereum in both Layer 1 and Layer 2,” Outumouro he stated.
Supporting this stance, analysts at Santiment have observed an increase in transactions among Ethereum whales. Between March 19 and 21, this group completed 59,137 transactions worth more than $100,000. The company also saw a significant 7% reduction in average 30-day ETH transaction volume, signaling the potential for a market rebound.
Read more: Ethereum (ETH) Price Forecast for 2024/2025/2030
Additionally, analysts revealed that ETH's relative strength index (RSI) dropped to 28.5, which is the lowest level since late January. The RSI serves as a momentum indicator to identify overbought or oversold market conditions, with readings below 30 typically indicating an oversold area.
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