Where have the Ethereum cops gone? An ETH under $ 4,000 does not attract traders

Cryptocurrency prices were revised sharply today, including those of Ether (ETH), but it’s a short-term move that doesn’t reflect events on a more macroeconomic level. who continue to paint an optimistic outlook for assets like Ether and Bitcoin.

In the last 30 days The price of Ether is up 96%, rising from $ 2,138 to $ 4,200 on May 11. Typically all traders are believed to be consumed with euphoria and this would be reflected in the funding rate, which hits all-time highs in Ether Futures contracts, but at the moment it is not.

The funding rate appears to have stagnated on April 18th and At the moment, there doesn’t seem to be anything that could be done to rekindle buyer leverage.

8-hour financing rate for Ether Perpetual Futures. Source: Bybt
Where have the Ethereum cops gone?  An ETH under $ 4,000 does not attract traders
Where have the Ethereum cops gone? An ETH under $ 4,000 does not attract traders

Note that the cost of longs (buyers) to move open positions reached 0.20% for 8 hours on February 20, which is 4.3% per week. A price surge of 74% in 30 days created this situation as Ether tried to break the $ 2,000 resistance.

More recently, a similar situation occurred on April 3, after ether rose 43% to an all-time high of $ 2,150. Movements like this often mark an overuse of leverage by retailers. In the meantime, whales and arbitration tribunals are taking long positions with fixed monthly futures contracts to avoid fluctuations in interest rates.

The 19% negative price hike on April 17 triggered the settlement of long futures contracts valued at $ 1 billion. This event depressed the bulls’ morale and also undermined their confidence in creating leverage long positions.

Professional traders also lack trust

It usually takes retailers longer to recover from unexpected losses, but this time around, even professional retailers lack conviction despite the rally.

The net positioning of professional traders is calculated by analyzing the consolidated positions in spot, perpetual and futures contracts. This provides a clearer view of whether professional traders are going bullish or bearish.

With this in mind, there is occasional variation in methodology between different exchanges, so viewers should keep an eye on the changes, not the absolute numbers.

Ratio of ETH long and short positions of professional traders on each exchange. Source: Bybt

Despite the all-time high of $ 4,380 on May 12, these professional traders are nowhere near the highest ratio of long and short positions. OKEx represents the most drastic change as the indicator hit 0.97 on April 18th and has since fallen to 0.50, meaning professional traders are 2 to 1 net short.

The ratio of long to short positions for Binance professional traders has ranged from 0.86 to 0.95 for the past thirty days, and the indicator is currently at 0.89. This should be interpreted as a position “neutral”, which seems strange given the 96% increase over that period.

Finally, Huobi’s Best Traders Leverage Indicator peaked at 1.00am on May 4th, indicating a balanced position between longs and shorts. However, it’s currently at 0.95, indicating a lack of enthusiasm.

Bitcoin price action could be the reason

It’s no secret that Bitcoin’s (BTC) moves are driving the general sentiment of traders, even if it means encouraging the price to stabilize near $ 55,000.

Posts like this can be found all over Twitter, and in some ways affirm that investors expect altcoins to go down if Bitcoin drops below $ 50,000. This can be the main reason behind the lack of confidence in Ether Longs.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph.com. Every investment and every trade involves risk. You must do your own research when making a decision.

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