Ethereum Traders Buy the Dip: What Happened and Why?

Ethereum's seen a flurry of activity lately, specifically a $359 million net outflow from exchanges on Monday. That's the third-largest single-day outflow since October, according to CoinGlass data. The narrative being spun is that this is bullish, a sign of investors “buying the dip.” But before we uncork the champagne, let's dissect this a bit.

Decoding the Outflow Signal

The immediate interpretation is straightforward: more ETH is leaving exchanges for private wallets than is being deposited. Textbook bullish, right? The logic is that people are moving their coins off exchanges because they intend to hold them long-term, reducing the available supply and (in theory) driving up the price. We've seen this movie before, apparently. The two prior instances of significant outflows – $677 million on October 10 and $361 million on October 21 – were followed by price bumps of 13% and 7.9%, respectively.

Shivam Thakral, CEO of BuyUcoin, told Decrypt that the outflow "could point to renewed accumulation or dip buying," which is exactly what you'd expect him to say. The question is, should we take that at face value?

Here's where the skepticism kicks in. Correlation isn't causation. Just because outflows preceded price increases twice doesn't guarantee it'll happen again. It's a small sample size, and drawing firm conclusions from two data points is statistically dubious.

Also, let's consider the magnitude. This recent $359 million outflow, while substantial, is less than half the size of the October 10 outflow that preceded the 13% jump. Does that mean we should expect a smaller bounce this time around? Possibly.

The other factor to consider is the context. The article mentions a temporary pause in the U.S.-China trade war as a "key supportive factor." But trade wars are notoriously fickle. A tweet, a policy shift, and boom – risk-off sentiment returns, and all bets are off.

The Competition Heats Up

It's also worth remembering the broader landscape. Ethereum isn't the only game in town anymore. As another article notes, competitors like Solana and Avalanche have emerged, and they're not exactly slouches. Solana, for instance, boasts transaction speeds far exceeding Ethereum's (100,000 transactions per second versus Ethereum's 15-30).

And this is the part of the report that I find genuinely puzzling. Why are we focusing solely on exchange outflows as a bullish signal when the competitive landscape is shifting so rapidly? Outflows might indicate accumulation, but they could also indicate a strategic repositioning – investors moving their assets to other platforms that offer better functionality, lower fees, or access to specific applications. We don't have enough data to know for sure.

The other article also points out that Ethereum's growth is slowing. While it saw massive gains in 2020 (472%) and 2021 (395%), its year-to-date performance in 2025 is a comparatively paltry 9%. That's a self-correction for precision; actually, it's around 10.4% as of today. Can Ethereum still deliver 20% annual growth? Maybe. But even if it does, turning $10,000 into $60,000 over a decade isn't exactly "life-changing wealth," as the other article suggests. Could Buying Ethereum Today Set You Up for Life?

And let's not forget the prediction markets. Users of Myriad (launched by Decrypt's parent company, Dastan) are currently bearish on Ethereum, placing a 61% chance on it dropping to $3,100 rather than rising to $4,500. Now, prediction markets aren't crystal balls (obviously), but they do reflect the aggregate sentiment of a certain group of traders.

A Calculated Gamble, Not a Sure Thing

So, what's the verdict? Ethereum's dip-buying signal is intriguing, but it's far from a guaranteed win. The historical data is limited, the macro environment is uncertain, and the competitive landscape is intensifying. Treat it as a calculated gamble, not a sure thing.

Don't Bet the Farm