$2B of Ether being deposited to exchanges. Should we be concerned?

Assets covered: Ethereum (ETH)

Metrics used: Exchange Inflow, Exchange Outflow, Active Addresses, Average Fees

Charts layout: https://app.santiment.net/s/I0WF69b2

Tuesday uncovered an outstanding exchange inflow spike both in ETH and BTC.

What could we prepare for?

Exchange Inflow

Here's how we see ETH flow into exchanges:

A strong spike on the right suggesting billions of dollars in Ether being deposited to exchanges.

Same thing happened to BTC:

Exchange flow balance for both coins is up too, so the amount of BTC and ETH in/out of exchanges is substantially in the favor of coins 'in'.

If you take a look at top transactions for ETH the most likely culprit is this address - https://app.santiment.net/s/Zk0usRYJ

Sent 600,000 ETH to Binance. Last acquired ETH on July 2nd at ~$2k. So huge that it breaks overall ETH exchange flow charts:

Based on its behavior so far, it doesn't look like an undiscovered exchange wallet (https://etherscan.io/address/0xdee6238780f98c0ca2c2c28453149bea49a3abc9). Judging by on-chain data it might be a whale possibly looking to take some profits.

This is certainly a concerning signal: whoever is sending money to exchanges seems to be doing a significant profit.

Previous similar spikes in profit taking sometimes have coincided with local price tops.

Active Addresses and fees

By the way active addresses for Ether are not great. May be because of the fees.

Fees are picking up, active addresses are going down. Getting expensive to interact.

Perhaps it's one of the reasons why we see a divergence between fees and active addresses. Based on previous behavior we should assume that the addresses are going to decline a little bit.

So we've got a few concerning signals: exchange inflow, address activity fairly low. May be there are some people starting to take profits and you should at least be careful.

Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.