Both quarterly and monthly results have been largely positive in Q2.
When looking at Ethereum [ETH]Its 10.48% increase in the second quarter appears to be impressive at first. ETH’s April’s performance is only 7.3% which is about 1.7x less than Bitcoin. [BTC] ROI. The trend has been similar in May, where ETH gains are about two times smaller than Bitcoin. This raises questions as to whether Ethereum will be able to surpass Bitcoin during Q2.
Binance’s Ethereum flows are thus becoming increasingly significant. In the graph below you can see that early May saw a surge in activity on chain, especially in terms of exchange deposits. Binance recorded multiple spikes every hour in Ethereum deposits.
In order to put things in perspective, since March, the biggest events were the 6th (216,152 Ethereum, $511 Million), 8th (98,552ETH, 224million), and 9th (125146ETH, 2888million).
What is the key message? Binance’s ETH reserves have also continued to increase over the past year, and now total 3.62 millions ETH. This is approximately 24.6% (or roughly 24.6%) of all ETH that exchanges hold. Together, increasing ETH reserves and rising ETH flows suggest that Ethereum is experiencing a sustained pressure on distribution. This may contribute to Ethereum’s current consolidation phase. This trend is reinforced by recent whale activity.
Lookonchain is a website that provides information about a variety of topics. whale recently deposited Arkham shows that another whale transferred around $180 million in ETH worth to Binance. The main reason for this is that large-holders continue to infuse funds into exchanges. They are adding near-term demand pressure.
This raises the obvious question: is Ethereum’s rally in Q2 against Bitcoin at risk now?
Ethereum’s liquid sweep aligns with whale shorts
The ability to time market action is an important risk management strategy.
The context of this article is whale positioning On Bitfinex the short exposure to Ethereum’s surge is beginning to gain more importance. It is important to note that this position does not seem random. It suggests that a strategic set-up is in place, possibly to trap late longs, and then profit from a downward move, as liquidity pockets targeted and flushed.
Ethereum’s heatmap of liquidation helps to clarify this structure. According to the below chart, ETH is currently characterized by two liquidity clusters. A liquidity cluster is present on the downside in the range of $2,180 to $ 2,260.
Binance’s inflows of Ethereum are a real factor.
It’s a simple logic: As distribution pressure increases and bid support is relatively weak, ETH supply dynamics seem to tilt in favor of bears. It makes sense to take on more short positions in this situation, as Ethereum could potentially be heading into a trap.
Binance ETH flow is a critical metric for this cycle if this trend persists.
Final summary
- Binance’s rising ETH flows, increased reserves and whale deposits indicate that distribution pressure is still present and there will be weak bid support.
- Increased short positioning, as well as clustered liquidity zones, point to an eventual downside sweep. Ethereum’s second quarter performance against Bitcoin is under threat.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: ambcrypto.com
