Ethereum is approaching ATH, but derivative dates reflect mixed emotions

Ethereum (ETH) ‘s rapid approach to $ 4,760 today wowed investors, showing it is just over 2.2% up before returning to its all-time high (ATH) of $ 4,870, hit 20 days ago .

While the price action looks appealing in the spot market, let’s take a look at what is happening in the ether derivatives markets.

Ether ETH / USD price chart | Source: TradingView

Commodities and stocks took a hit today after the US Federal Reserve admitted that inflation was more than “temporary,” and Fed chairman Jerome Powell said banks’ monetary easing may end sooner than expected.

Retailers do not trust completely

To understand how confident traders are about the resilience of ether, investors should analyze the data on perpetual futures contracts. The instrument is popular with retailers as its price tends to follow the regular spot market.

In any futures trade, long and short orders are always matched, but their leverage is different. As a result, the exchanges charge a funding rate to the party taking more leverage, and that fee is paid to the counterparty.

Financing rate 8 hours Ether .Perpetual futures contract | Source: Coinglass.com

Neutral markets tend to have funding rates between 0% and 0.03%, which is 0.6% per week. This shows that Long is the payer, and the data shows that retailers have been largely neutral since Nov 4th. The last increase above 0.07% was on October 21st.

Top traders reduce long positions

The data provided by the exchange shows a trader’s net long-to-short position. By analyzing each client’s position on spots, futures and perpetual contracts, investors can better understand whether top traders are trending up or down.

There are sometimes methodological differences between exchanges, so viewers should keep an eye on changes rather than absolute metrics.

Long-to-short ratios of the top ETH traders | Source: Coinglass.com

Despite Ether’s 17% rally over the past four days, the top traders at Huobi and OKEx have reduced their long positions. The move was even more evident on OKEx as the indicator made a sharp move from the bulls favoring 120% on November 25th to a 30% advantage just three days later.

Currently, the data suggests that whales and arbitrageurs have reduced their long exposure while retailers are skeptical of the recent bull run.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Mr. Teacher

According to Cointelegraph

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