Ethereum Faces Renewed Downside Risk as Binance Netflows Stay Negative

According to a report shared by CryptoQuant, Ethereum is showing a structurally weak setup as price continues to fall despite persistent negative exchange netflows on Binance.

On the chart, ETH price has declined from the $4,800–$5,000 area earlier in 2025 to roughly $2,700, even as Ethereum continues to be withdrawn from Binance. Exchange Netflow has remained predominantly negative throughout this entire decline, indicating sustained outflows rather than inflows to the exchange.

Negative Netflow, Falling Price – A Key Divergence

Historically, prolonged negative exchange netflow tends to reduce spot selling pressure and support price. However, the current structure shows the opposite outcome.

Despite ETH leaving Binance, price has continued to make lower highs and lower lows, breaking down from the $4,000 region, failing to hold $3,500, and now trading near $2,700. This divergence suggests that spot supply reduction alone is not enough to stabilize price.

Where the Selling Is Likely Occurring

CryptoQuant highlights that this behavior points to selling pressure occurring primarily outside Binance spot markets:

• Price formation appears to be driven by derivatives and margin markets, where short-biased positioning dominates.
• ETH withdrawn from Binance may still be sold via OTC desks, prime brokers, other exchanges, or Layer-2 ecosystems, none of which are captured directly in Binance netflow data.
• As a result, spot outflows do not translate into immediate price support.

Demand Is Weak, Not Supply

The chart structure suggests a lack of aggressive participation on both sides. While there are no strong ETH inflows back to Binance, there are also no meaningful inflows from buyers stepping in to absorb downside.

This is critical because Binance hosts the deepest spot and derivatives liquidity in the market. When activity remains muted here, it usually reflects broader institutional caution rather than localized behavior.

Moving Averages Confirm Structural Pressure

Both the SMA(50) and SMA(100) of Exchange Netflow have broken lower and remain firmly in negative territory. At the same time, price continues to trend down, reinforcing the view that demand deterioration is outpacing supply reduction.

In past cycles, similar setups, where ETH trades lower while exchange outflows persist, have often appeared late in downtrends, shortly before a local or macro bottom forms.

What the Chart Is Signaling

Based strictly on the chart:

• ETH price has fallen from ~$5,000 to ~$2,700.
• Binance exchange netflows remain consistently negative.
• Selling pressure is likely derivatives-driven, not spot-driven.
• Buyers remain cautious, despite reduced exchange supply.

This structure suggests Ethereum may be approaching a new low or late-stage downside phase, rather than a confirmed reversal, with stabilization dependent on a recovery in demand, not further supply contraction.

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