• Ethereum has seen a decline recently due to an increase in deposits to centralized exchanges.
• An analyst on Twitter noted that there was increased short-term selling pressure in the ETH market.
• The “Ethereum active deposits” metric measures the daily total number of exchange addresses taking part in deposit activity.
Ethereum Exchange Deposits Spike
The recent trend of Ethereum exchange deposits have spiked, with an elevated amount of deposits towards centralized exchanges being observed. An analyst on Twitter pointed out that this could be a sign of increased short-term selling pressure in the ETH market at the moment.
Measuring Exchange Activity
The relevant indicator for measuring the amount of users making deposits to these platforms is the “Ethereum active deposits” metric, which keeps track of unique exchange addresses taking part in deposit activity on any given day. When this value is high, it means a large number of users are transferring their coins to these platforms currently, and can be taken as an indication of a potential mass selloff in the market.
Recent data shows that the Ethereum active deposits metric has surged to some pretty high values during the weekend, with more than 20,000 exchange addresses being observed taking part in deposit activity at its peak. This is significantly more than what has been seen so far this year, and also marks its highest point since November 2021 – when Ethereum set its all-time high price.
As mentioned before, when there are signs of increased short-term selling pressure in any cryptocurrency market like ETH, it could mean that holders are moving their coins away from their wallets and onto exchanges with dumping purposes in mind. Thus furthering analysis into this matter by looking at indicators like the Ethereum active deposits would give us valuable insights into whether or not people are actually cashing out right now or not.
In conclusion, while we cannot definitively prove that holders are cashing out right now based solely off metrics like Ethereum active deposits alone; they do provide us with useful information about user behaviour and can help give us better insight into possible changes coming up for cryptocurrencies like Ethereum going forward.