As investor demand appears to be rising, Ethereum prices appear to span $3,000 in the past week’s psychological $3,000. However, the dream hit a major stumbling block in late Thursday, June 13, after geopolitical tensions escalated rapidly.
Israeli air strikes on Iran did not spend much time affecting global financial markets, and cryptocurrency prices succumbed to new downward pressures. Specifically, Ethereum is the second largest cryptocurrency on the market cap, losing 6% of its value in the past 24 hours.
Is capital flowing from ETH into BTC?
In a QuickTake post on crypto platforms, Chain analyst Amr Taha shares new insights into the recent wave of volatility that has entered the cryptocurrency market. Crypto experts point out that Ethereum and Bitcoin have been affected by recent global events.
First, Taha noted that the decline in Ethereum Open Interest (OI) is the world’s largest cryptocurrency exchange through transaction volume. Data from CryptoQuant show that the ETH OI indicator has experienced a significant decline of 19% over the past 24 hours, consistent with the price reduction.
The open interest metric estimates the total amount of derivatives flowing into a particular cryptocurrency at any given time. A decline in OI values is often considered a bearish signal because it indicates a decline in investor confidence and positive sentiment.
According to Taha, the latest decline in Ethereum’s open interest points to a wave of sales caused by panic, with investors instinctively exiting their long positions. “Traders may be anxious to close their long positions, either manually worrying about deeper losses or automatically causing an attack on the loss trigger through forced liquidation,” the analyst said.
Taha has established a parallel relationship between the decline in Ethereum openness and the flow of Bitcoin outflows of Coinbase (Coinbase, the largest centralized exchange in the United States). Encrypted data shows that over the past day, 7,000 BTC has been drastically withdrawn from trading platforms.
According to Taha, the massive exchange outflow of Bitcoin coincides with the decline in Ethereum, which suggests that fresh purchases and large investors may strategically reposition the accumulation. For ETH, this trend may not be particularly positive, as it suggests that capital may be returning to major cryptocurrencies.
Ethereum price at a glance
As of this writing, ETH priced at about $2,546, reflecting a nearly 4% drop in the past 24 hours.
