Ethereum is falling off the exchanges in the biggest pullback wave since October

More than 220,000 ETH have left exchanges in the strongest pullback wave since last October.

Ethereum appears to be struggling to hold $2,000 after the market-wide pullback. Over the past week, the leading altcoin has fallen almost 14%.

However, it just recorded the biggest foreign exchange outflow since October as traders moved out their assets to accumulate.

Accelerate ETH withdrawals

ETH withdrawals from trading platforms have surged. Data collected by CryptoQuant revealed that the figure has reached the highest level since October. Recent net flow data from the Ethereum exchange shows a clear acceleration in outflows, indicative of a shift in investor behavior towards reducing the amount of ETH held on such platforms.

Across all exchanges, net Ethereum outflows have exceeded 220,000 ETH in recent days. This marks the largest wave of withdrawals since last October. Such an increase reflects a significant volume of ETH being moved from exchanges to private wallets or long-term storage protocols.

CryptoQuant stated that such moves are often associated with accumulation phases or with investors trying to reduce risk by keeping assets off exchanges. Binance was responsible for much of this activity, as daily net outflows reached approximately 158,000 ETH on February 5.

This was the highest level of Ethereum withdrawals at Binance since last August, implying that much of the recent currency outflows were concentrated on the platform with the greatest liquidity.

From a price perspective, these strong outflows occurred while the crypto asset was trading between $1,800 and $2,000. This means that some investors were repositioning or holding ETH at this price level after the recent market pullback.

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CryptoQuant further added that a steady outflow of Ethereum of this magnitude reduces the amount of supply readily available for sale. As a result, this trend is seen as structurally supportive for prices in the near term, especially if market momentum stabilizes or improves.

$2,000 level now under heavy scrutiny

According to market experts, all eyes are on the $2,000 level after ETH was rejected near higher resistance. For example, Ted Pillows said ETH was rejected out of the USD 2,100 resistance zone and identified USD 2,000 as the key level to hold. He warned that losing it could lead to a rebound from last week’s low. So does analyst Ali Martinez echoed emphasis on this level.

In addition, Michaël van de Poppe, founder of MN Capital, shed light on the gap between network activity and price performance. He said price action in the early stages of growth often lags behind fundamentals, similar to Ethereum’s 2019 cycle when market growth was initially limited.

Van de Poppe also explained that the asset’s price only started to rise after stablecoin transactions on the network peaked and found that stablecoin transaction volumes on Ethereum have increased by 200% over the past 18 months, while ETH has fallen by around 30%, presenting an opportunity for buyers.