Ethereum Major Migration! Large CEX Balances Shrink, $888 Million ETH Outflow May Signal Long-term Bullish Trends

After experiencing a week of intense fluctuations, the price of Ethereum (ETH) has surpassed $4,400, but before the weekend, it briefly fell by more than 7%, causing market sentiment to become cautious. However, on-chain data shows that the ETH balances on large CEX exchanges are rapidly shrinking, with over $888 million worth of ETH withdrawn in the past few days, which may suggest that long-term bullish potential is brewing.

The derivatives market is bearish, and the funding rate has turned negative

Cryptocurrency analyst Amr Taha pointed out in his latest observation on CryptoQuant that the ETH futures market has shown a significant cooling recently. The open interest has dropped by 29% in just two days, after the ETH price fell below 4,400 USD from above 4,700 USD. It is also worth noting that the perpetual futures funding rates of several large CEXs have turned negative, indicating that short positions are dominant. This means that bearish traders need to pay fees to maintain their short positions, reflecting the pessimistic sentiment in the short-term market.

However, Taha added that historical data shows that extremely negative funding rates often occur simultaneously with oversold conditions, and once there are other bullish catalysts, it may trigger a rapid rebound.

Spot market capital outflow hits a new high

In stark contrast to the pessimism in the derivatives market, the spot market has seen a massive outflow of ETH. On-chain data shows that over the past few days, a total of 200,000 ETH (approximately $888 million) has been withdrawn from major large CEX exchanges, with a single platform accounting for an outflow of as much as 128,000 ETH, while another platform saw around 72,000 ETH withdrawn.

Typically, large withdrawals mean that investors are transferring assets to cold wallets or staking, which is seen as a bullish signal to reduce selling pressure. Some institutions may also transfer funds to over-the-counter (OTC) trading for bulk transactions to avoid impacting market prices.

Supply tightening may pave the way for a long-term pump

Taha pointed out that historically similar large-scale withdrawals of ETH from exchanges often precede significant price increases. When the available liquidity on exchanges decreases, the market supply tightens, creating conditions for a subsequent price rebound.

Currently, the ETH price is fluctuating around $4,446, with short-term support at $4,400. Once a rebound confirms the oversold condition, it may validate a long-term bullish view; on the contrary, if it breaks the support, it may first test lower ranges before looking for a rebound opportunity.

Conclusion

The current market structure of Ethereum presents a contradictory situation of "bearish on derivatives, bullish on spot". In the short term, negative funding rates and a decline in open interest reflect traders' cautious attitude; however, looking at the on-chain outflows and the shrinking exchange balances, long-term investors and institutions are actively reducing the sellable chips.

Investors should closely monitor the $4,400 support level and changes in capital flow, as this may be a key signal for determining the next wave of ETH market movement.