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On-chain data shows that Ethereum has seen a massive $505 million inflow into Binance over the past day, a sign that the selling could continue.
Inflows to the Ethereum exchange have risen sharply over the last day
According to data from analyst firm Santiment, this increase in supply on exchanges is the largest seen the day before the merger. “Supply on Exchanges” is an indicator that, as its name suggests, measures the percentage of the total supply of Ethereum that is currently held in the wallets of all centralized exchanges.
Related Reading: Bitcoin Bearish Signal: Miners Keep Selling
When the value of this metric increases, it means that investors are depositing some coins on exchanges right now. Such a trend could be bearish for the price of an asset, as one of the main reasons investors move their coins to exchanges is to sell them.
On the other hand, decreasing values of this indicator means that a net amount of ETH is currently leaving these platforms. Such findings could be a sign that holders are hoarding the cryptocurrency, which can naturally be bullish for the asset’s value in the long run.
Now here is a chart showing the trend of Ethereum supply on exchanges over the past few months:
The metric seems to have skyrocketed in recent days | Source: Sentiment on Twitter.
As shown in the chart above, the supply of Ethereum on exchanges has skyrocketed over the past day, meaning that investors have invested large amounts of ETH on these platforms.
The chart also has data for another ETH indicator: “stock flow balance”. This metric measures the net number of coins that enter or leave exchanges, which means that the balance of exchange flows essentially tracks the changes that occur in the supply indicator on exchanges.
Over the past day, this indicator showed a large positive value, which indicates that the inflow significantly exceeded the outflow during this period. According to the metric, about 320,000 ETH ($584.6 million at the current price) entered exchange wallets with this surge.
This net increase in exchange supply is actually the largest the cryptocurrency has seen since September 14, 2022, the day before the transition to the Proof-of-Stake consensus mechanism took place.
Interestingly, the vast majority of the surge in inflows was due to just one transfer, as data from the cryptocurrency transaction tracking service Whale Alert shows.
— Whale Alert (@whale_alert) May 1, 2023
This transfer to Binance was worth almost $505 million and is one of the largest transactions between an unknown wallet and an exchange seen in the last five years.
It is not clear if the whale made this deposit with the intent to sell or use any of the other services offered by the platform. However, if selling is indeed the target here, then this massive inflow could be bad news for the asset’s price.
At the time of writing, Ethereum is trading around $1,800, up 1% from last week.
ETH has dropped in the last couple of days | Source: ETHUSD on TradingView