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Ether Volatility Expected as Traders Flood Exchanges With $231M of ETH Amid ETF Hopes

May 21, 2024
    Exchanges experienced a net inflow of 62,000 ETH ($231 million) this week, suggesting a period of volatility is coming.Daily spot buying from ETH permanent holders hit its highest level in 2024 this week.A significant price correction is expected if a spot ether ETF is delayed or denied due to high levels of open interest.
As a researcher with experience in the crypto market, I believe we’re on the brink of an exciting and potentially volatile period for Ether (ETH). According to recent data from CryptoQuant, exchange inflows have spiked to their highest level since March, with over 62,000 ether ($231 million) flowing into exchanges this week. This trend is often associated with increased volatility in the market.According to a report from data provider CryptoQuant, the cryptocurrency Ether (ETH) may go through a volatile phase this week as exchange deposits have reached their peak levels since March.
This week, the daily net transfer of Ethereum (ETH) between exchanges amounted to approximately 62,000 Ether or around $231 million. Large volumes of transactions on exchanges often correspond with market instability, according to the analysis.

The recent surge in deposits can be attributed to ethereum’s impressive price rally over the past two days. Ether’s value has spiked by 22%, following analyst James Seyffart’s prediction that the likelihood of an approved spot ether ETF reaches 75%. Moreover, reports indicate that SEC review processes for these ETF applications have suddenly gained momentum.

Traders showed strong enthusiasm by significantly increasing their long positions on Ethereum (ETH) in perpetual exchanges and purchasing large quantities in the spot market. This represents the most substantial daily buying from Ethereum permanent holders during the year 2024. These trades were initiated based on optimism that Ethereum’s price will experience a surge similar to Bitcoin (BTC), following the announcement of U.S. approval for spot Bitcoin ETFs, which started circulating last year.

Over a 48-hour span, approximately 9,300 Ether tokens were forcedly sold off by traders holding short positions due to the surge in market demand for this cryptocurrency. This sudden liquidation is referred to as a “short squeeze.”

As a crypto investor, I closely monitor the market news and one piece of information that recently caught my attention is the potential impact on Ether’s price if an ETF application gets delayed or denied by the Securities and Exchange Commission (SEC). CryptoQuant, a popular data analytics platform in the crypto space, has warned us about this possibility. With open interest at a record-breaking high of $11.7 billion, such a development could lead to a significant price reaction.

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2024-05-22 18:59