Ethereum is close to the new ATH, but derivatives data reflects mixed sentiment


Ether today (Ethereum) The price briefly touched US$4,760, exciting investors and reminding the world that altcoins are only 2.2% lower than the all-time high of US$4,870 set 20 days ago. Although spot price movements may be interesting, let’s look at what is happening in the ether derivatives market.

The price of ETH/USD on Bitstamp. Source: TradingView

Although it is possible to draw a downward channel at $3,960, today’s 5.4% positive trend seems to be the same as Bitcoin (Bitcoin) Negative performance.

Earlier today, commodities and stocks were hit after the U.S. U.S. Federal Reserve Acknowledging that inflation is not just a “temporary” trend, Federal Reserve Chairman Jerome Powell said that the bank’s loose monetary policy may end sooner than expected.

Retail traders are not fully confident

To understand traders’ confidence in the rebound in the price of Ether, we should analyze perpetual contract futures data. This tool is the market of choice for retail traders because its price tends to track the regular spot market.

In any futures contract transaction, long (buyer) and short (seller) are always matched, but their leverage ratios are different. Therefore, the exchange will charge a funding rate from the party that needs more leverage and pay the fee to the other party.

Ether Perpetual Futures 8-hour financing interest rate. Source: Coinglass.com

The neutral market tends to show a positive funding rate of 0% to 0.03%, which is equivalent to 0.6% per week. This shows that the bulls are the payers, and the data shows that retail traders have mostly remained neutral since November 4, and the last breakthrough of 0.07% occurred on October 21.

Top traders reduce long positions

The data provided by the exchange highlights the long to short net positions of traders. By analyzing the positions of each client’s spot, perpetual contracts and futures contracts, we can better understand whether professional traders tend to be bullish or bearish.

There are occasional differences in methodologies between different exchanges, so viewers should focus on changes rather than absolute numbers.

The ETH long-short ratio of top traders on the exchange. Source: Coinglass.com

Although Ether has risen by 17% in the past four days, the top traders of Huobi and OKEx have reduced their long positions. This move is even more obvious on OKEx, as the indicator has rapidly changed from a long advantage of 120% on November 25 to a meager advantage of 30% three days later.

Currently, data shows that whales and arbitrage trading desks have reduced their long positions, while retail traders are still skeptical of the recent bull market.

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