During the past week alone $2.21 billion worth of Ethereum was transferred back to exchanges, says blockchain data firm Santiment. It is the most sustained upswing in ETH inflows to the exchanges since the crypto market crash in May last year.
In a meantime, the trend of Ethereum exchange inflows has been the opposite for the past few years. The volume of ETHs leaving exchanges has been on the rise since August 2020, according to Santiment.
Indicates Bearish Sentiment
Exchange inflows show the amounts of coins that have been transferred to exchange wallets across a given period. The metric has long been used as an indicator for determining trends in the crypto market.
Traditionally, the exchange inflows increase when the coin’s price decreases and signifies the bearish sentiment over the specific asset.
As seen, the price of Ethereum has been on a downtrend since March, when also the broader cryptocurrency market entered a correction. The second-largest crypto by market cap lost almost 50% of its value since then.
The past month has not been much easier for ETH as well, with the coin dropping from $2.937 to $1.740 due to the macroeconomic uncertainties and also the collapse of Terra.
Institutional Interest Decreases
However, it’s not only external factors to blame for the growing ETH supply on exchanges. As seen from the recent CoinShares fund managers’ survey, institutional investors’ interest in Ethereum is decreasing.
This is “stark contrast to most other altcoins”, says CoinShares, adding that the fund manager’s survey highlights their increasing allocation to Polkadot (DOT), Cardano (ADA), and Ripple (XRP) at the expense of Ethereum.
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Source: Cryptocurrency - investing.com
