Ethereum (ETH) has been moving sideways around the 3,000 USD level for the past two weeks. Although recent trading has come from companies like BitMine and Trend Research, it seems that demand is still insufficient.
The following information will reveal the remaining picture as selling pressure remains equally strong. Therefore, ETH is unlikely to recover quickly in the short term.
1. ETH reserves on trading platforms have increased again during the Christmas week.
Data from CryptoQuant shows that ETH reserves across all exchanges have consistently decreased over the past several months.
However, the trend reversed in December, with ETH reserves on exchanges increasing from 16.2 million to 16.6 million this week, which is equivalent to 400,000 ETH being moved onto exchanges.
On-chain data reveals that one 'OG whale' deposited 100,000 ETH into Binance alone.
According to a recent report from BeInCrypto, BitMine Immersion Technologies purchased 67,886 ETH this week, and Trend Research bought another 46,379 ETH, but still, this is less than the amount of ETH that has been transferred to exchanges.
If ETH is transferred to exchanges for sale and the volume exceeds the absorption from the buy side, selling pressure may intensify. If this trend continues until the end of the year, the price of ETH may face additional downward pressure.
2. The estimated leverage ratio of Ethereum remains high.
Another important indicator is the Estimated Leverage Ratio of Ethereum, which remains at a concerning level according to CryptoQuant.
This rate is calculated from the amount of open interest on exchanges divided by the coin reserves, reflecting the average leverage used by traders. If this rate increases, it means more investors are using high leverage in the derivatives market.
On October 10, the date of the highest market clearing in history, the ratio was 0.72, and it has since returned to near that level, with some periods seeing values even touching 0.76.
As leverage remains high, Ethereum is at risk of significant price movements, which could lead to continuous liquidations.
3. Ethereum Premium on Coinbase has become more negative in December
BeInCrypto previously reported that Ethereum's Coinbase Premium has entered negative territory in December.
Throughout the Christmas week, this indicator has fallen further into the negative, currently at -0.08, which is considered the lowest in the past month.
This indicator shows the percentage price difference between ETH on Coinbase Pro (USD pair) and Binance (USDT pair). Negative values indicate that the price on Coinbase is lower.
This trend reflects that U.S. investors continue to sell coins at lower prices, making it difficult for ETH to recover in the short term until the Coinbase Premium index turns positive again.
4. ETH ETF funds in the U.S. have seen outflows for the second consecutive month.
As December is coming to an end, the ETH ETF inflow seems to be closing with a net outflow for the second consecutive month.
Last month, the net inflow from all ETH ETFs totaled -USD1.42 billion, and this month the outflow has exceeded USD560 million.
With no new capital flowing into ETH, there is a lack of momentum for upward movement, and if outflows continue, especially during the low trading volume holiday season, prices may retest lower support levels.
Since the beginning of November, the 30-day moving average (30D-SMA) of net inflows into both Bitcoin and Ethereum ETFs has turned negative and remains negative, reflecting a situation where some market participants have not returned and some institutional portfolios have been partially liquidated. All of this underscores the contraction of liquidity in the overall crypto market, according to Glassnode.
In summary, the four key signals include higher exchange reserves, increased leverage usage, a larger negative spread, and continuous outflows from the ETF, all indicating that ETH may still be in a consolidation phase or could drop further.
Setting appropriate stop-loss points for derivative positions and carefully allocating investments in spot purchases will help traders mitigate risks when unexpected volatility occurs.
