Bitcoin is showing bearish signs. On-chain activity suggests Ethereum could be on the brink of its all-time peak before BTC.
Ethereum will be worth more than Bitcoin sooner.
As CryptoQuant CEO Ki Young Ju noted in a PublishIndicators could suggest ETH will eventually reach its ATH quicker than BTC in long-term.
The net exchange flow is an indicator which depends on two metrics: the outgoing flow and the incoming flow. The first is the total assets that move from personal wallets into exchanges.
This is the total amount that Ethereum (or Bitcoin), leaves the exchange wallets. If the inflow value rises, more cryptos are sent out to exchanges for the purpose selling or buying altcoins.
However, a slight increase in the exit indicator means that more investors are interested either in holding their coins or selling them through OTC transactions.
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The netflow metric is the difference between the two indicators. A positive value means that the entries exceed the exits. This may indicate that there is selling pressure.
Also, a negative netflow value can indicate buying pressure in a market, since outflows are more than entries.
Here’s how the Ethereum 30-day moving mean (MA) netflow looked over the past one year.
Source:| Source: CryptoQuant
As you can see, ETH has experienced a few significant negative spikes lately. This indicates that there is a lot of buying pressure in the market, as many investors withdraw their cryptos from exchanges and keep it in their personal wallets.
This is due to ETH’s seller side liquidity crisis continuing to intensify. This environment could lead to higher prices in the long-term.
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BTC, however seems to not be so lucky. Foreign exchange reserves, which shows the total value of coins in foreign portfolios, stopped the downtrend in May. This means that exchanges receive a substantial amount of coins to sell.
ETH’s current price is close to ATH, which is more than BTC. Considering the whole picture, Ethereum could reach its ATH sooner than Bitcoin in the long-term.
Price in Ethereum
The price of Ethereum is currently hovering around $ 3,000 as of this writing, down nearly 6% over the past seven days. Below is a chart that shows the trends in cryptocurrency prices over the past three-months.
ETH drops 6% in 24 hours | Source: ETHUSD on TradingView
Featured image from Unsplash.com. Charts by CryptoQuant.com, TradingView.com.