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Ethereum (ETH) has encountered significant market turbulence over the past 24 hours. During the day, nearly $258 million worth of ETH was dumped to crypto exchanges. Meanwhile, ETH price has struggled to stay above the $2,400 mark, continuing its recent downtrend despite a slight rebound.
Ethereum Selloff Intensifies
In the past 24 hours, 112,000 ETH, worth approximately $257.6 million, were sent to crypto exchanges. This substantial movement of assets to exchanges often signals impending selling pressure, which weighs on the Ethereum price action. Moreover, on-chain metrics paint a challenging picture for Ether’s near-term outlook.
112,000 $ETH were sent to crypto exchanges in the past 24 hours, worth around $257.6 million. pic.twitter.com/35Bg1mSWax
— Ali (@ali_charts) September 13, 2024
According to data from YCharts, the current 30-day average for daily active addresses (DAA) on the Ethereum network has fallen to 430,250, marking a 7% decline from 90 days ago. This decrease in activity suggests fewer users are interacting with the Ethereum blockchain, indicating reduced ETH transactions. The contrast is even higher when compared to the height of the 2021 bull market in May, when Ethereum recorded 799,580 DAAs.
Adding to Ethereum’s woes, its Layer 2 (L2) solutions, designed to improve scalability and reduce fees, are performing well, but at the expense of the Ethereum mainnet. Justin Bons, Founder and CIO of Cyber Capital, criticized L2s as centralized networks funded by venture capitalists that siphon transaction fees from Ethereum’s Layer 1 (L1).
In addition, Ethereum co-founder Vitalik Buterin has echoed concerns, urging L2 networks to decentralize further. Furthermore, Buterin has even stated he will stop mentioning L2s that do not meet adequate decentralization standards.
Ether ETF Outflows
The outlook for U.S. spot Ethereum ETFs has also been grim. Data from SoSoValue shows a net negative flow of $20.14 million on September 12. This brings the cumulative total net outflow for these Ethereum ETFs to $582.74 million.
On the other hand, the spot Bitcoin ETFs have seen $17 billion in inflows since their approval on January 10, despite significant outflows from Grayscale’s GBTC fund. This suggests increased investor confidence in Bitcoin while Ethereum has continued to struggle.
Additionally, Ethereum mining wallets have also seen a decline. According to data from Santiment, Ethereum mining wallets now hold 1.18 million ETH, a 4.5% decrease from their 2024 peak on June 10. In comparison, Bitcoin mining wallets hold 2.14 million BTC, a 4.3% decrease from their April 21 peak. These decreases suggest miners may be selling off their holdings, potentially to brace for market volatility.
Also Read: Ether Spot ETF saw Net Outflows of $20.1 M on September 12, 2024 ET