Investors are abandoning Ethereum, on-chain data reveals

With investor demand seemingly on the rise, the price of Ethereum appears likely to surpass the psychological level of $3,000 in the past week. However, this dream encountered a major obstacle after geopolitical tensions quickly escalated late on Thursday, June 13. It didn’t take long for Israel’s airstrike on Iran to impact the global financial markets, with cryptocurrency prices facing a new wave of downward pressure. Specifically, Ethereum, the second largest cryptocurrency by market capitalization, has lost about 6% of its value in the past 24 hours. Will capital flow out of ETH into BTC? In a Quicktake post on the CryptoQuant platform, chain analyst Amr Taha shared new insights into the recent wave of volatility that has hit the cryptocurrency market. The cryptocurrency expert noted that Ethereum and Bitcoin have been particularly affected by recent global developments. First, Taha noted the decrease in Ethereum Open Interest (OI) on Binance, the largest cryptocurrency exchange in the world by trading volume. Data from CryptoQuant shows that the ETH OI figure has significantly decreased by 19% in the past 24 hours, coinciding with the price drop. The Open Interest Indicator estimates the total amount of money flowing into derivatives of a particular cryptocurrency at any given time. A falling OI value is often considered a bearish signal, as it indicates a decline in investor confidence and positive sentiment.

According to Taha, the latest sudden drop in Ethereum Open Interest indicates a wave of panic selling, with investors instinctively fleeing their long positions. “Traders may have rushed to close their long positions, either manually out of fear of deeper losses or automatically through forced liquidations when stop-loss orders are triggered,” the analyst said.

Taha has drawn a parallel between the declining Ethereum Open Interest and the outflow of Bitcoin from Coinbase, the largest centralized exchange in the United States. Data from CryptoQuant shows that 7,000 BTC have been withdrawn from the trading platform in the past day. According to Taha, this significant Bitcoin flow coincides exactly with the decline of Ethereum OI, indicating that new purchases and large investors may be repositioning their strategy to accumulate. This trend may not be particularly positive for ETH, as it suggests that capital may be returning to the top cryptocurrency.