For a long time now, Ethereum (ETH) exchange netflow on Binance has remained predominantly negative — meaning more ETH is being withdrawn than deposited.
Under normal market conditions, this is considered a bullish signal because fewer coins on exchanges usually mean reduced selling pressure in the medium term.
But here’s the puzzle 🤔
ETH price is still declining.
So what’s really going on?
Let’s break it down 👇
1️⃣ Selling Pressure Has Shifted to Derivatives 📊
Netflow data only tracks spot market movements, not what’s happening in margin and derivatives markets.
Right now:
Short-biased leveraged positions dominate
Price discovery is being driven by perpetuals and futures, not spot buying
Traders are selling ETH synthetically without holding actual coins
📌 Result: ETH can drop even while spot supply is leaving exchanges.
2️⃣ ETH Is Leaving Binance — But Selling Happens Elsewhere 🌐
Yes, ETH is being withdrawn from Binance… but that doesn’t mean it’s being held.
Large players can still sell via:
OTC desks 🏦
Prime brokers
Other centralized exchanges
Layer-2 ecosystems and cross-chain routes
📌 Binance outflows ≠ no selling
It simply means selling is happening off-exchange or indirectly.
3️⃣ No Sellers… But No Buyers Either ❄️
This is a key insight.
When price declines while netflow stays negative:
There are no aggressive sellers on Binance
But buyers are also hesitant
Binance has:
The deepest spot + derivatives liquidity
The most stable liquidation engine
Early visibility of institutional flows
📌 If inflows are missing on Binance, they’re missing almost everywhere — including ETFs.
4️⃣ Supply Is Falling, but Demand Is Falling Faster
This is the core issue.
ETH supply on exchanges is decreasing ✅
But demand has collapsed even more ❌
Why?
Macro uncertainty 🌍
Risk-off sentiment
Heavy short positioning
Capital staying sidelined
Netflow SMA(50) and SMA(100) remain deeply negative, showing real investor behavior, not noise.
🧠 Final Take: This Structure Often Forms Near a Bottom 🟡
Historically, when:
Exchange netflows stay negative
Price keeps falling
Shorts dominate
Spot demand dries up
👉 Markets are often closer to a bottom than a top
This doesn’t guarantee an immediate reversal — but it does suggest that selling pressure is being exhausted, not strengthened.
📌 When demand returns, supply will already be tight.
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