While Ethereum appears to have begun its major rally, the asset has recently seen significant activity on the Deribit Options Exchange which raises the question of what this means for Ethereum’s price.
CryptoQuant analyst known as Amr Taha detailed These developments are in a post on the CryptoQuant QuickTake platform. The analysis focused on significant outflows from the exchange into cold wallets, highlighting the potential impacts on market sentiment and liquidity.
Net ETH flows on derivatives and their implications
According to Taha, the Deribit Options exchange recorded a notable transaction involving 233,000 ETH transferred to a cold wallet. The deal is worth approximately $783 million, and was executed at an average price of $3,350 per Ethereum.
This was not limited to Ethereum alone, as Bitcoin also saw a similar outflow, as 31,000 Bitcoins worth $3.038 billion were moved into cold storage. These transfers have raised speculation about the motives behind this activity and their potential impact on the broader market.
As a result, CryptoQuant analyst highlighted four main implications of this move. First, the decrease in selling pressure was noticeable. Assets stored in cold wallets are unlikely to be sold immediately, which may reduce liquidity on exchanges.
Taha pointed out that this scenario may contribute to price stability or even enhance the upward trend in the market if demand remains stable or increases.
Another key point that can be drawn from these transactions is the potential for institutional accumulation. Such large-scale transfers often indicate that institutional investors or high-net-worth individuals are confident in the long-term value of Ethereum.
Furthermore, Taha highlighted Derebit’s strategy of moving these funds as part of its risk management approach. The analyst wrote:
Moving assets to cold storage is a security practice to reduce exposure to hacking risks. It also reflects a cautious approach, perhaps due to regulatory scrutiny or expected market volatility.
Additionally, Taha highlighted that the move could also have an impact on market sentiment as traders could interpret these transactions as bullish, “resulting in increased buying activity.”
Ethereum market performance
Meanwhile, Ethereum is currently trading above the $3,300 level after an 8.2% increase in the past week and 1.3% in the past 24 hours. The asset’s market capitalization has also risen significantly along with its price with the current valuation approaching $400 billion.
According to a popular cryptocurrency analyst known as EᴛʜᴇʀNᴀꜱʏᴏɴᴀL on
According to the analyst, “altcoins will follow” as the price of Ethereum continues to rise.
#Ethereum $10k+ step by step!$ Ethereum It repeats the bull speaker pattern it drew as it heads into the 2016-2017 mega bull period, ahead of the 2024-2025 mega bull period.#Alternative I will follow! pic.twitter.com/VRVI8lwnsS
—EᴛʜᴇʀNᴀꜱʏᴏɴᴀL
(@EtherNasyonaL) November 22, 2024
Featured image created with DALL-E, chart from TradingView