While Ethereum appears to have begun its own major rally, the asset has recently seen significant activity on the Deribit Options Exchange, raising the question of what it means for the price of ETH.
A CryptoQuant analyst known as Amr Taha detailed these developments in a publication on the CryptoQuant QuickTake platform. The analysis focused on substantial outflows from the exchange to cold wallets, highlighting potential implications for market sentiment and liquidity.
ETH Netflows on Deribit and the implications
According to Taha, the Deribit Options Exchange recorded a notable transaction involving 233,000 ETH transferred to a cold wallet. Valued at approximately $783 million, the transaction was executed at an average price of $3,350 per Ethereum.
This wasn’t just limited to Ethereum: Bitcoin also witnessed a similar outflow, with 31,000 BTC worth $3.038 billion moved into cold storage. These transfers have sparked speculation about the motivations behind such activity and its potential impact on the broader market.
As a result, the CryptoQuant analyst highlighted four main implications of this move. Firstly, the reduction in selling pressure is notable. Assets stored in cold wallets are less likely to be sold immediately, which can decrease liquidity on exchanges.
Taha noted that this scenario can contribute to price stability or even further drive the bullish trend in the market if demand remains stable or increases.
Another key takeaway from these transactions is the possibility of institutional accumulation. These 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 Deribit’s strategy of moving these funds as part of a risk management approach. The analyst wrote:
Moving assets to cold storage is a security practice to minimize exposure to hacking risks. It also reflects a cautious approach, likely due to regulatory scrutiny or anticipated market volatility.
Furthermore, Taha highlighted that this move could also have an impact on market sentiment, where traders could interpret these transactions as bullish, “leading to increased buying activity.”
Ethereum Market Performance
Meanwhile, Ethereum is currently trading above the $3,300 mark following an increase of 8.2% in the last week and 1.3% in the last 24 hours. The market capitalization of the asset has also increased significantly along with its price, with a current valuation close to $400 billion.
According to renowned crypto analyst known as EᴛʜᴇʀNᴀꜱʏᴏɴᴀL at
According to the analyst, “altcoins will follow” as Ethereum continues to rise.
#Ethereum $10k+ step by step!$ETH repeats the bullish megaphone pattern it drew while heading into the 2016-2017 bullish megaperiod, before the 2024-2025 bullish megaperiod.#alternatives will continue! pic.twitter.com/VRVI8lwnsS
— EᴛʜᴇʀNᴀꜱʏᴏɴᴀL
(@EtherNasyonaL) November 22, 2024
Featured image created with DALL-E, TradingView chart
