The Ethereum exchange balance has been on a steady decline, indicating that savvy market players are in the process of accumulating the altcoin. As of February 11th, a significant 100k ETH has been taken off exchanges, according to sources. Ali Martinez reported that 330,000 ETH, valued at over $660 million, were withdrawn from exchanges. This bolstered the concept of holder accumulation. The waiting period for the Ethereum validator entry queue stands at 71 days. The deposit waiting queue has reached an unprecedented level, with nearly 4.1 million ETH recorded, marking an all-time high.
The data points collectively indicated a strong long-term conviction among holders. This conviction alone fails to support Ethereum prices. Long-term investors may consider entering at these price levels; however, it appears that the selling pressure could still be in play. In a recent update on X, it is highlighted that the 30-day moving average of spot ETF netflows for Bitcoin and Ethereum has remained negative over the last three months. The Open Interest has seen a notable decline. This marked a prolonged phase of negative average flows, underscoring the bearish sentiment prevailing in the market. Demand remains absent, signaling caution for those eager to purchase at what appears to be a bear market bottom.
The ETH Funding Rate has remained significantly negative for a substantial portion of the last two weeks. Santiment highlighted in a post on X that this surge in short positioning is the most pronounced it has been since August 2024. The significantly negative Funding Rate indicates that the majority of the market is adopting a bearish stance. While this indicates a robust belief in the downside, it simultaneously increases the likelihood of a sudden short squeeze should the sentiment change. Digital asset treasuries maintained their positions in ETH, yet only one company was actively increasing its holdings. Bitmine Immersion Technologies has acquired 820k ETH since mid-November. Despite the adverse market conditions in recent weeks, their buying continued unabated. AMBCrypto has revealed that the company has increased its holdings by 180k ETH over the last 30 days.
This does not ensure that a market bottom is imminent. Buyers need to exercise caution, as bear market bottoms typically require months to establish. Typically, a sudden decline in price followed by a swift V-shaped recovery is not indicative of the conclusion of bear markets. The movement of ETH away from exchanges, coupled with the extended validator deposit queue, underscores the strong conviction of long-term holders. BMNR stood out as the sole DAT actively purchasing ETH, even as declining funding rates and open interest indicated a pronounced bearish sentiment in the market.