$660M in Ethereum leaves exchanges – Yet ETH’s bottom remains unclear!

The Ethereum [ETH] exchange balance continued to dwindle, showing smart market participants were accumulating the altcoin. Since the 11th of February, 100k ETH has been removed from exchanges, AMBCrypto reported.

Crypto analyst and trader Ali Martinez showed that 330,000k ETH, worth over $660 million, were withdrawn from exchanges. This reinforced the holder accumulation idea.

The Ethereum validator entry queue has a 71-day waiting period. Nearly 4.1 million ETH was in the deposit waiting queue, an all-time high.

Together, these data points showed long-term conviction from holders. This conviction is not enough to prop Ethereum prices up. Long-term investors can look to buy at these price levels, but the selling pressure might not be exhausted yet.

Ethereum capitulation is not over

Source: Glassnode on X

In a post on X, the crypto intelligence platform Glassnode observed that the 30-day moving average of spot ETF netflows for both Bitcoin [BTC] and Ethereum has been negative for the past three months. The Open Interest has also fallen significantly.

This was an extended period of negative average flows and highlighted the bearish pressure in the market. Demand has not yet come in, a warning for those looking to buy what feels like a bear market bottom.

There could be more pain ahead.

Source: Glassnode

The ETH Funding Rate has been deeply negative for much of the past two weeks. Santiment pointed out in a post on X that this wave of short positioning was the most extreme it has been since August 2024.

The deeply negative Funding Rate shows that most of the market is positioned bearishly. While this reflects strong conviction on the downside, it also raises the chances of a sharp short squeeze if sentiment shifts.

Source: Glassnode

Digital asset treasuries continued to hold on to the ETH, but only one company was aggressively adding more. Bitmine Immersion Technologies [BMNR] has bought 820k ETH since mid-November.

The adverse market conditions in recent weeks did not halt their buying. AMBCrypto reported that the company added 180k ETH to its holdings in the past 30 days.

This does not guarantee that a market bottom is close. Buyers should beware that bear market bottoms take months to form. Generally, a sharp price drop followed by a V-recovery is not how bear markets end.

Final Thoughts

• The ETH exodus from exchanges and the long validator deposit queue reflected long-term holder conviction.
• BMNR was the only DAT to continue buying ETH, while falling funding rates and OI reflected a deep bearish market bias.