Market

ETH falls below $ 3,800, but many traders don’t want to go short at the current levels

Although Ether (ETH) hit an all-time high of $ 4,870 on November 10, the bulls have little reason to celebrate. The 290% increase from early 2021 to today was dwarfed by the 18% drop in prices in December, but the total value of Assets Locked (TVL) in Ethereum smart contracts has increased 9x, at $ 155 billion .

The price history chart of the past few months doesn’t really tell the full story, as a market cap of $ 450 billion helped make Ether one of the top 20 assets in the world behind Johnson & Co. Johnson.

ETH / USDT Daily Chart | Source: TradingView

2021 will be a great year of growth for decentralized exchanges with a daily volume of $ 3 billion, 340% more than last quarter of 2020. However, many well-known traders are confused and tied within a descending parallel channel.

The futures market does not reflect panic selling

To find out the next trend in ETH, we can look at the funding ratio of the futures market. It is usually calculated every eight hours and is used to ensure that the prices of the futures and spot markets do not vary too much. A positive funding rate indicates that buyers (long) are demanding more leverage. However, the reverse situation occurs when sellers (short) demand more leverage.

8 Hour Financing Rate of Ether Perpetual Futures | Source: Coinglass.com

As noted above, the funding rate stayed near zero in December, suggesting balanced leverage demand from buyers and sellers. If there is a moment of panic, it will be displayed on this indicator.

Professional traders bet bullish

Data provided by exchanges shows traders’ long-to-short ratios. By analyzing each client’s position on spots, futures and perpetual contracts, people can better understand whether professional traders are trending up or down.

There are sometimes methodological differences between different exchanges, so viewers should pay attention to changes rather than absolute metrics.

Long-to-short ratio of professional ETH traders | Source: Coinglass

Despite the 9% correction in Ether since December 24th, top traders on Binance, Huobi and OKEx have increased their long leverage. More specifically, Binance is the only exchange facing a slight drop in the long-to-short ratio of top traders. It rose from 0.98 to 0.92. However, that impact was more than offset when the top OKEx traders increased their stakes from 1.67 to 3.20 in one week.

There is currently hardly any sign of a bear market in the market. According to the data, professional traders are currently buying dips, while net retail demand for short positions has changed little over the past month. Of course, no one can accurately predict the next price move, but a look at the data shows that traders have little interest in short selling at current levels.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

  • January 1, 2022 Technical Analysis: BTC, ETH, BNB, SOL, ADA, XRP, LUNA, AVAX, DOT, DOGE
  • Bitcoin can’t hit analysts’ $ 100,000 target by year-end, but what about 2022?

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page

Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.

Recent Posts

Best Cryptos to Invest in December 2024: Qubetics Surges Past $2.6M as Solana Records Big Whale Pump and Polkadot Aims for $6

Best Cryptos to Invest in December 2024: Qubetics surges past $2.6M, Solana’s whale pump ignites…

48 minutes ago

Bitcoin Trader Turned $100M in His 20s—Now Reveals 5 Altcoins to Build a $50M Portfolio, With Memecoins Leading the Way!

As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…

2 hours ago

Which Crypto Will Explode in the 2024-2025 Bull Run?

With the crypto market reaching new peaks, many are eager to discover digital currencies poised…

2 hours ago

Dogecoin and Shiba Inu Approach $1, but All Eyes Are on XYZVerse’s Push to $10!

XYZVerse, blending sports passion with meme energy, is set to make a significant impact, uniting…

3 hours ago

Will Bitcoin Crash or Soar Past $105K in 2024?

Will Bitcoin Crash?" seems to be one of the most controversial questions, as the price…

4 hours ago

The Best Crypto for Passive Income? 10% Weekly Gains and 20% Final Surge—Qubetics Mirrors Cosmos’ Early Success!

There’s always that one coin people wish they hadn’t overlooked. For many, Cosmos ($ATOM) is…

4 hours ago

This website uses cookies.