Traders Pulling From ETH Derivative Exchanges: What’s Next For Ethereum?

Ethereum
remains
under
pressure
at
press
time,
looking
at
the
formation
in
the
daily
chart.
In
summary,
ETH
is
stable
on
the
last
day
but
down
9%
in
the
last
week
of
trading.
Of
note,
there
has
been
a
drastic
drop
in
trading
volume
over
the
past
few
days.

Overall,
traders
are
upbeat,
expecting
prices
to
turn
around
and
rip
higher,
clearing
immediate
local
resistances.
Even
as
this
develops,
on-chain
data
points
to
other
developments
that
leverage
traders
should
closely
monitor.

Over
40,000
ETH
Moved
From
Derivatives
Exchanges

According
to
one
analyst,
citing
CryptoQuant
data,
there
have
been
more
outflows
from
derivative
exchanges
over
the
past
few
trading
weeks.
Specifically,
the
analyst

observes

that
over
40,000
ETH
have
been
moved
from
derivatives
trading
platforms
like
Binance
and
OKX.

From
a
trading
standpoint,
whenever
there
is
a
spike
in
outflows
from
derivatives
to
spot
exchanges,
it
could
suggest
that
traders
are
cautious
and
waiting
for
clearer
definitions
before
committing.
However,
this
is
also
positive,
especially
considering
that
outflows
from
derivatives
mean
increasing
inflows
to
spot
exchanges.

When
there
is
a
spike
in
deposits
to
spot
exchanges,
especially
from
derivatives
exchanges,
not
external
non-custodial
wallets,
decreasing
speculative
pressure
can
support
prices.
As
outflows
increase
from
derivatives
exchanges,
it
signals
that
fewer
traders
are
willing
to
punt
on
crypto
prices,
placing
leveraged
short
or
long
positions.

Reading
from
this
development,
how
prices
evolve
in
the
next
few
trading
sessions
will
be
critical.
Technically,
a
drop
below
$2,100
and
August
lows
may
spark
a
sell-off,
forcing
even
more
leveraged
traders
to
shift
to
preservation
mode
and
move
coins
to
spot
and,
from
there,
possibly
to
stablecoins.

Conversely,
a
reversal
above
$2,800
could
lift
spirits
and
sentiment,
forming
a
base
for
another
leg
up
to
$3,000
and
$3,500.
In
turn,
confidence
will
rise,
forcing
more
traders
to
borrow
ETH
from
exchanges
as
they
place
leveraged
positions.

Ethereum
Gas
Fees
And
Institutional
Demand
Fading

Amid
this
development,
Ethereum
continues
to
face
headwinds.
For
example,
some
analysts
argue
declining
gas
fees
could
negatively
impact
demand,
questioning
the
network’s
long-term
sustainability.

As
of
September
9,
Ethereum
gas
fees
stood
at
2.862
gwei,
down
from
14.21
gwei
registered
one
year
ago,
according
to

YCharts.

Additionally,
institutional
demand
for
Ethereum
via
spot
ETFs
continues
to
decline.
So
far,
net
outflows
from
all
spot
Ethereum
ETFs
in
the
United
States
exceed
$568
million,
according
to

SosoValue.

Feature
image
from
Canva,
chart
from
TradingView