Ethereum has been showing clear bullish strength in the last days, breaking above its realized price at $1,900. This level is important since it indicates that we have surpassed the average purchase price of all Ethereum coins in circulation. Because of low transaction activity, long-term holders have been reaping the rewards of being in profitable positions. The upswing, which started in about mid-April, has brought Ethereum past the $1,900 mark within the last week.
Ethereum Inflows into Binance
Only within the past 48 hours, more than 98,000 ETH poured into Binance. That’s a huge influx and would be one of the biggest we’ve seen in recent weeks. This means that on Binance, there has been sustained, persistent Ethereum exit, with traders choosing to withdraw their Ethereum rather than sell it. The recent increase in inflows is especially remarkable. This spike in Ethereum inflows into Binance may be an early indicator of a reversal in market dynamics.
Ethereum inflows into Binance are increasing sharply. This increase is probably due to greater trading activity and the strategic action of large holders getting into position. That’s a lot of Ethereum flocking on to the exchange. Both of these effects will be significant in determining short-term price action and the underlying mood in the market.
USDT Withdrawals and Liquidity Concerns
At the same time, Binance has now had three straight days of large USDT net withdrawals. These withdrawals contribute to growing fears over short-term liquidity on the exchange. Narrow outflow of stablecoins like USDT further threatens overall market stability, potentially causing a domino effect. These stablecoins are mostly used for trading/hedging positions, and their reduction may cap Ethereum’s growth prospects even more.
"Binance’s Liquidity Shuffle: Tether Is Exiting Binance While Ethereum Pours In" - Amr Taha
Market Outlook
With the confluence of these factors, the outlook for Ethereum is complicated. Ethereum has reached its price growth above $1,900, and strong Ethereum inflows signal a bullish sentiment. The simultaneous USDT withdrawals introduce a cautionary trumpet call to the upbeat tune. Ethereum has to find a way to absorb the added Ethereum supply now available to the market on Binance. Diminished stablecoin liquidity will almost certainly affect what kind of legs this present rally can have.
"This surge in ETH supply on Binance, combined with the exit of stablecoin liquidity, may create an unfavorable environment for further upside unless new capital enters the market,” - Taha
