Ethereum (ETH) has been leading the market with a recent sharp rise, but at the same time, selling pressure aimed at profit-taking is gradually becoming more apparent. On-chain data analysis firm CryptoQuant warned of the possibility of a short-term correction based on the increase in Ethereum's exchange inflows and price overheating indicators.
Ethereum soared to $4,743 this week, reaching its highest level since November 2021. It is just a few percentage points away from its all-time high of $4,891 and is currently trading at around $4,500. The recent three-day vertical rise has led to a shift to strength against Bitcoin (BTC), with the ETH/BTC price ratio breaking through the one-year moving average. Historically, this has been a signal of a bull market.
Particularly in the ETF market, preference for Ethereum is becoming more evident. Inflows into spot-based Ethereum ETFs have surpassed Bitcoin ETFs, with the ETH/BTC ETF holding ratio rising to 0.15. This is a threefold increase from the 0.05 just three months ago, suggesting that institutional investors are placing more expectations on Ethereum.
In the derivatives market, investors' attention is also focused on ETH. Currently, Ethereum's open interest rate has risen to 0.78 compared to BTC, a significant increase from the previous 0.57. This indicates that traders participating in perpetual futures trading are betting more aggressively on ETH.
Ethereum's spot trading volume has also overwhelmed BTC. Over the past four weeks, ETH's trading volume has exceeded BTC by billions of dollars, with the most recent compilation showing a daily trading volume of $10 billion. This is the first time since 2017 that Ethereum's trading volume has significantly led Bitcoin. A similar trend was observed during the rally from 2019 to 2021.
However, beneath the upward trend, signals predicting profit-taking are also being detected. The ETH/BTC ratio has entered an overvaluation zone with previous downfall precedents, and ETH deposits to exchanges have soared to levels exceeding BTC. CryptoQuant analyzed that this sudden inflow could be aimed at switching to selling and may potentially intensify selling pressure in the short term.
Experts advise that while Ethereum is securing a firm market dominance, the current trend suggests the need to consider the possibility of a short-term correction rather than excessive optimism. Proximity to price peaks, overheated indicators compared to fundamentals, and accelerating exchange inflows are all interpreted as warning signs of a potential turning point.
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