Bitcoin and Ethereum funding rates and currency inflows indicate intense selling pressure
Bitcoin and Ethereum owners are facing increased selling pressure, as indicated by currency inflows and funding rates.
Despite occasional relief rallies, the bears have taken firm control of the markets as assets plunge to record lows. Bitcoin (BTC) and Ethereum (ETH) – the two largest cryptocurrencies by valuation – have not been spared in this attack. In addition, recent data confirms claims of sell signals by holders of both assets.
On-chain data analysis platform, CryptoQuant, recently revealed the metrics as the macro climate triggers further bearishness. CryptoQuant analysis confirmed the selling pressure, taking into account two crucial indicators.
Weekly Bitcoin Highlights (23/09/2022)
“Inflows and Funding Rates’ Fixed Selling Signals.”
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— CryptoQuant.com (@cryptoquant_com) 23 September 2022
“Two data sets highlighted the selling pressure in both Bitcoin and Ethereum this week: Exchange Inflow and Funding Rates,” the analysis noted. The article highlighted the declining macro condition, as the Fed expects a rate hike to 4.6% in 2023 – a review of the average forecast of 3.6% in March.
Apparently, exchanges have recently seen a massive influx of Bitcoin and Ethereum tokens. Generally, investors move their holdings to exchanges when they intend to sell them. Consequently, an increase in exchange inflows tends to pump bearishness into the atmosphere.
Since CryptoQuant BTC Exchange Netflow currently indicates a low value compared to the 7-day average, inflows have generally increased during this period. In addition, BTC reserve on exchanges has seen an increase recently, indicating selling pressure.
With ETH, Change Netflow reveals a massively bearish indication. Exchanges have recently seen an increasing influx of ETH, as the Exchange Netflow value remains higher than its 7-day average. The CryptoQuant analysis highlighted that these inflows of ETH tokens were seen right before the merger.
Furthermore, the derivatives markets do not bode well for BTC and ETH. Funding rates for both assets have remained negative, indicating that investors are ready to short the assets. “Additionally, as the merger approached, funding rates for ETH were the worst on record,” CryptoQuant analysis added.
In addition to their financing rates ETH Taker Buy Sell Relationship is below the 1 mark. With a value of 0.96, the ratio indicates a dominant bearish sentiment in the ETH derivatives market.
As for BTC, the Taker Buy Sell Ratio shows an even more dominant bearish sentiment. The current ratio is 0.95, which shows that receivers fill more sell orders than buy orders.
“In addition to the two sets of metrics above, we continue to see increasing activity from whales sending coins to exchanges, underpinning the selling pressure,” CryptoQuant concluded.
As macroeconomic conditions continue to deteriorate, risk assets have weakened in the latest battle against the bears. Due to their recent entanglement with traditional finance, cryptocurrencies have not been caught up in this battle.
BTC and ETH are trading at $18,906 and $1,286 as of press time. Despite the merger, ETH has seen a more massive decline over the past seven days despite the merger, losing 12.64% of its value. BTC, on the other hand, is down 4.74% in the last week.
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