Recent on-chain data from the on-chain analytics firm, Santiment, reveals that the Ethereum network has experienced a massive inflow of $505 million into Binance within the past day. This surge in supply on exchanges, the largest observed since the day prior to the Merge, indicates that selling may be ongoing, which could have bearish consequences for the asset’s price. This is because investors typically deposit their coins to exchanges for selling-related purposes.
This movement of Ethereum to exchanges can be tracked using the “supply on exchanges” indicator, which measures the percentage of the total Ethereum supply currently sitting in the wallets of all centralized exchanges. The chart displaying recent trend data on the Ethereum supply on exchanges over the past few months confirms that the recent sharp rise in the past day indicates a large amount of ETH has been deposited to these platforms.
The other Ethereum indicator, the “exchange flow balance,” tracks the changes happening in the supply on exchanges indicator. It measures the net number of coins that are flowing into or out of exchanges. Based on the metric, around 320,000 ETH (equivalent to $584.6 million at the current price) has entered into the wallets of exchanges due to this surge.
The recent surge is notable, as it is the largest increase the cryptocurrency has seen since September 14, 2022, the day before the transition to the proof-of-stake consensus mechanism. Moreover, the majority of the inflow spike came from a single transfer of 273,781 ETH worth $504,986,096 from an unknown wallet to Binance, as reported by Whale Alert, a cryptocurrency transaction tracker service. Interestingly, this transaction is one of the largest transactions between an unknown wallet and an exchange that has been observed in the last five years.
It is unknown whether the whale transferred the coins to sell or to use other services Binance offers. Regardless of their intention, this huge inflow of ETH on the exchanges may be bad news for the asset’s price if the whale’s reason for depositing was for selling purposes.
At the time of writing, Ethereum is currently trading at around $1,800, representing a 1% increase in the last week. The price chart displayed by TradingView.com shows that Ethereum has declined during the last couple of days.
In summary, while the current data does not clearly indicate the direction that Ethereum price will take going forward, the huge inflow of ETH on exchanges and Binance in particular raises concerns about the asset’s near-term prospects. For now, the Ethereum community and investors will continue to monitor the situation closely to see how the market responds.