After a few rough weeks, it appears things are turning around for all significant crypto assets. While the market momentum still remains iffy, the metrics head in the right direction. An intriguing correlation has formed between Bitcoin, Ethereum, and UNI as of late.
Decreasing Exchange Inflow Volumes Are Good
For the longest time, there has been a strong increase in volume being sent to exchanges. This trend affects all crypto assets equally, as people seem intent on cashing out as soon as the price dips ever so slightly. Given the recent 50% correction for all markets, it isn’t hard to see why some people would be inclined to liquidate their holdings in search of lower entry points.
Keeping the above in mind, it is remarkable to see the exchange inflow volume decrease for these three assets. In Bitcoin’s case, there is a new one-month low, driving the hourly chart down to 1,432.117 BTC. A significant improvement from the over 3,500 BTC just a few weeks ago. It remains highly unlikely the Bitcoin price will go much lower at this point.
For Ethereum, there is not necessarily a decrease in exchange inflow. However, there is certainly a decrease in the overall liquidity on exchanges. Reaching a two-month low at this crucial stage confirms the market reversal may come into effect very soon. That will not happen without a more substantial decline in balances, though, as a two-year low needs to be maintained, rather than form the exception.
One would expect the price to follow suit when the two leading crypto assets note such bullish metrics. Unfortunately, that’s not the case yet. Cryptocurrency markets rarely respond logically to ongoing developments, including metrics. However, a decrease in liquidity needs to account for something sooner or later. Whether that will be a price uptrend or more bearish pressure is impossible to predict at this time.
UNI Follows A Similar Path
Interestingly enough, this decrease in exchange inflow volume appears to transcend Bitcoin and Ethereum. Although those are the two crucial markets most people keep an eye on, there are other assets to explore. Uniswap’ UNI, for example, notes a one-month low for exchange inflow volume. A bit of a surprising development at this time, but a welcome one.
Even though UNI is not necessarily the most appealing asset to many people, it still remains a valuable DeFi currency. With its ties to the largest decentralized exchange and role in DeFi yield farming, demand for UNI has not diminished in the slightest. One can argue Uniswap’s native token is still in price discovery range at the moment.
Similar to Bitcoin, UNI’s exchange inflow has decreased by over 50% in a matter of weeks. This further highlights the possibility of the recent market crash being a well-coordinated effort rather than a convenient set of circumstances. Whether that means the reversal will be a coordinated effort as well is difficult to predict.