Ethereum [ETH] net flows into crypto exchanges rallied to a two-year high this week amid the legal campaign to classify the leading altcoin as a security.

AMBCrypto previously reported that the US Securities and Exchanges Commission (SEC) had sent investigative subpoenas to U.S. companies, amongst which is the Swiss-based Ethereum Foundation, the non-profit entity that supports the network.

According to the report, the regulatory watchdog launched its investigation into the Ethereum Foundation after the Ethereum network transitioned from a Proof-of-Work consensus mechanism to a Proof-of-Stake (PoS) model in September 2022.

IntoTheBlocks data showed that ETH net flows into exchanges this week totaled $720 million. According to the data provider, the last time the coins weekly flow into exchanges was this high was in September 2022.

When an asset witnesses a rally in its net flow into exchanges, it generally indicates that its holders are moving their tokens onto trading platforms to sell for profit or hedge against further losses.

These inflows resulted in a minor uptick in ETHs exchange reserve during the period under review. According to CryptoQuants data, it increased by 1%. At press time, 14.2 million ETH valued at around $47 million were held across exchanges.

While the spike in ETHs inflow into exchanges this week was partly due to the SECs move against the Ethereum Foundation, it was also attributable to the general market decline recorded during that period.

Per CoinGeckos data, the global cryptocurrency market capitalization dropped by 4% in the past seven days due to the surge in coin sell-offs.

This weeks assessment of how profitable ETH transactions were, revealed significant bearish sentiments in the market.

ETHs Market Value to Realized Value (MVRV) ratio plummeted by 22%, to be spotted at 90% at press time. Likewise, the daily ratio of ETHs transaction volume in profit to loss plunged to a low of 0.664.

A holistic consideration of these two key on-chain metrics presents a divergence. ETHs MVRV ratio of 90% suggests potential undervaluation, which could mean it is a good time to buy.

How much are1,10,100 ETHs worth today?

On the other hand, the 0.664 daily ratio of ETHs transaction volume in profit to loss showed that there are more investors who are selling their coins at a loss.

This divergence suggests that although ETH is currently undervalued, and now may be a good time to buy. Short-term sentiment among investors remains cautious or bearish. This is because investors are willing to sell at a loss rather than hold or buy more coins.

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Why Ethereums new 2-year high should worry ETH holders like you - AMBCrypto News