Indicators are increasing for a potential price correction wave for Ethereum, following massive flows towards exchanges and a notable decline in derivatives market support, raising concerns about selling pressure that could threaten the recent gains of the currency.
According to an analysis published on July 1 on the CryptoQuant platform by analyst Amr Taha, nearly 100,000 Ethereum coins, valued at over $250 million, were deposited into the Binance exchange in two large batches. Such deposits are usually a signal of a potential increase in supply, which could lead to selling pressure if investors' appetite to buy decreases.
The analysis indicated that the price of Ethereum in the spot market continued to record local peaks above $2,500 since June 26, while open interest in Ethereum contracts on Binance has seen a significant decline, recording lower peaks of less than $5.6 billion. This gap is an indicator of traders' caution and a decrease in the desire to open new positions.
This comes at a time when the market is witnessing a decline in overall liquidity, as the net liquidity of the U.S. Federal Reserve has decreased from $6.2 trillion to $5.84 trillion in recent weeks, which could negatively impact the performance of high-risk assets like cryptocurrencies.
Ethereum is currently trading at $2,451, down 0.5% over the last 24 hours, and nearing a technical resistance level at $2,455, which corresponds to the simple 20-day moving average.