ETH Outflows Signal Bullish Momentum as BTC Faces Correction Risk — CryptoQuant
On-chain data from CryptoQuant indicates a growing divergence between Bitcoin (BTC) and Ethereum (ETH), underscoring shifting market dynamics that could define the next phase of capital flows in digital assets.
On-chain data from CryptoQuant indicates a growing divergence between Bitcoin (BTC) and Ethereum (ETH), underscoring shifting market dynamics that could define the next phase of capital flows in digital assets .
According to CryptoQuant, Bitcoin’s exchange reserves remain steady at around 2.53 million BTC, showing little movement despite recent price swings. Historically, declining reserves suggest coins are leaving exchanges for long-term custody, reducing immediate sell pressure. This time, reserves are flat, signaling that a significant portion of supply remains liquid and potentially available for selling.
The trend coincides with BTC’s recent pullback from $123,000 to $113,000, raising the risk of a short-term correction. Analysts note that sustained elevated reserves often precede profit-taking, particularly during volatile market phases.
In contrast, Ethereum has recorded consistent net outflows from exchanges, with notable spikes of more than 300,000 ETH in late July and mid-August. These movements typically reflect coins being transferred into cold storage, staking pools, or institutional custody, reducing liquid supply.
Source:
CryptoQuant
ETH has traded between $4,150 and $4,400 in recent sessions, with its price action closely aligned to the outflow trend. The tightening of exchange balances supports a bullish narrative and points to growing institutional demand, with Ethereum increasingly positioned as a long-term asset.
The contrasting flows highlight a broader rotation of capital. While BTC consolidates with neutral-to-cautious signals, ETH appears to be gaining momentum from reduced sell-side pressure and expanding adoption.
For investors, the takeaway is clear: Bitcoin faces near-term correction risks if reserves remain elevated, while Ethereum shows stronger prospects for medium-term growth, supported by shrinking liquid supply and long-term positioning.
However, Bitcoin may be regaining ground technically. According to CryptoQuant contributor İbrahim Coşar, BTC has reclaimed its 50-day exponential moving average (EMA), a level that has historically marked the start of short-term rallies. If sustained, this could provide bullish momentum to counterbalance the current reserve-driven caution.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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