Ethereum Market Update

Ethereum’s exchange netflows on derivative exchanges fell below -400,000 ETH.
*CME ETH Futures Open Interest chart revealed a decline from $3,216.66M to $3,251.98M over 16 hours.

Ethereum’s exchange netflows on derivative exchanges recently fell below -400,000 ETH, coinciding with Bitcoin miner underpayment – a sign of market stress. These developments hinted at significant ETH withdrawal from exchanges. Historically, this is linked to reduced selling pressure and increased bullish sentiment.

A Possible Recovery on the Charts?

An analysis of the 1-hour ETH/USD chart on Binance showed ETH trading at around $2,685.55, following a fair recovery over the last 72 hours. However, the Bybit hack could still impact the altcoin’s value.
The Relative Strength Index (RSI) indicated neutral to oversold conditions, suggesting potential buying pressure. Historically, similar RSI levels precede price rebounds, supporting reduced selling pressure after major outflows.

The Aggregated Cumulative Volume Delta (CVD) at -112.02k reflected strong selling dominance, but accumulation by strategic traders was also observed. These signals indicated a bullish shift, reinforcing a potential move above $2,800 as traders adjusted their positions.

A Bullish Accumulation Signal

Ethereum’s three-month exchange netflows chart highlighted negative outflows of -191.96K ETH, with peak outflows observed recently. Major outflows usually imply reduced selling pressure as investors shift assets into cold storage. The price reaction near $2,730 followed by a decline to $2,529 indicated a market consolidation phase.

Miner underpayment stress indicated supply-side reductions, potentially setting the foundation for a rebound.

Market Positioning for the Next Move

An analysis of the CME ETH Futures Open Interest showed a decline from $3,216.66M to $3,251.98M over 16 hours. At press time, Ethereum was trading at $2,736.79, with the decrease in Open Interest signaling reduced speculative activity. A similar pattern in mid-2024 preceded price recoveries, suggesting market positioning before a potential move.

Lower Open Interest often indicates profit-taking or leverage reductions, hinting at market stabilization before a rebound driven by improving sentiment.

A Prelude to a Price Surge?

The 1-hour ETH/USD Volatility Index, smoothed over 10 periods, stood at 26.61. Volatility spiked during the sell-off to $2,618.17, but stabilized afterwards, signaling market uncertainty. However, reduced volatility aligned with historical post-outflow consolidations.

Holder Confidence Remains Strong Amid Market Stress

Finally, the Global In/Out of the Money showed 107.13M ETH in the money (75.06%), 24.24M ETH out of the money (16.98%), and 11.35M ETH at the money (7.95%), with ETH trading at $2,686.24.
A dominant in-the-money Ethereum supply suggests holder confidence, reducing sell-off risks. The out-of-the-money demographic hinted at resistance zones, but the overall structure pointed towards potential upside as miner underpayment pressure eased.
These distributions resembled past bullish recoveries, supporting the idea of accumulation after large outflows.