After spending most of the previous weeks in red, today, the global cryptocurrency market has flipped to green. This price action has been boosted by the leading cryptocurrency Bitcoin (BTC), which has temporarily surpassed the important $20,000 milestone.
Furthermore, as per Coinmarket cap data, the crypto market capitalization has risen from $864 billion to $914 billion in the previous 24 hours, indicating a $50 billion inflow.
After the celebration of Independence Day in the United States on July 4th, market participants drove the price of Ethereum, the second-largest crypto by market cap, to record highs, where the currency surpassed $1,120. Consequently, as Ether’s price rose again, there is a struggling on-chain data emergence in the marketplace.
When looking at Ethereum’s availability on exchanges, there is an increase in inflows on exchanges as traders constantly deposit their cash back to their exchange platforms. Whenever there is an increase in currency inflows, commodities or currencies suffer selling pressure in the coming days.
The flow of capital into exchanges is most probably due to market players searching for strategies to recover their cash following the dramatic fall in June. As the Ethereum price fell under the $800 region, the market’s selling pressure reduced dramatically.
The Situation Is Not Out Of Control
Increasing inflows on exchange platforms may not always be related to traders’ willingness to liquidate their assets, because centralized exchanges sometimes shift part of their assets from cold to hot wallets to boost liquidity position and give market participants with required cash.
In the month of June, a chain of sell-offs was also linked to big inflows on exchanges, as decentralized networks no longer store Ether as they did earlier. Traders are returning to greater “conventional” investing and trading products as interest for asset-backed loans declines.
At the time of reporting Ethereum is valued at $1,130. The marketplace is under the bearish influence since it is not obtaining sufficient purchasing support and is now trading below the 21-day moving average.