Ethereum approaches a new ATH, but data from analysts reflects investor skepticism in the market.
Since yesterday, BTC’s rally led to altcoins and led by Ethereum (ETH) also recovering quite strongly. ETH seems to be on its way to a new all-time high (ATH), but actual data shows that investors are a bit skeptical about the current rally. Will it continue to lead to altcoin season or just fake. Let’s learn about it with Primexbt.
At the time of writing, the price of Ether (ETH) has touched $4,760 which has excited investors and reminds us that the price of this altcoin is only 2.2% below the all-time high it has set. The previous setting was $4,870 achieved 20 days ago. While the spot price action can be intriguing, let’s see what’s happening in the Ether derivatives markets.
While a descending channel could be drawn showing support at $3,960, today’s 5.4% positive move appears to be decoupled from the negative performance of Bitcoin (BTC).
Earlier today, commodities and stocks took a hit after the US Federal Reserve acknowledged that inflation was not just a “fake” trend and Fed Chairman Jerome Powell said that monetary policies Bank easing may end sooner than anticipated.
The move of small and semi-professional investors.
To understand how confident traders are in Ether’s price resilience, one should analyze perpetual futures contract data. This instrument is a favorite among retail traders as its price tends to follow the regular spot market.
In any futures contract trade, the long (buyer) and short (seller) prices are always matched, but their leverage is different. As a result, exchanges will charge a funding rate to whichever party claims more leverage, and this fee is paid to the opposing party.
Neutral markets tend to show a positive funding rate of 0% to 0.03%, which equates to 0.6% per week. This shows that Longs are the payers and the data shows retail traders have been mostly neutral since Nov 4th and the last move above 0.07% happened on Nov 21 October.
Professional traders have had the tendency to reduce their long positions.
By analyzing every client’s position on spot, forward and futures contracts, one can better understand whether professional traders are leaning towards an uptrend or a downtrend.
There are sometimes methodological differences between different exchanges, so viewers are advised to monitor relative metrics and immediate changes rather than absolute metrics.
Despite Ether’s 17% gain over the past four days, top traders at Huobi and OKEx have started shorting.
For now, the data indicates that traders are not fully convinced of this bull run and are rather cautious during this uncertain period. And Primexbt trading advice for you is. Please manage your capital well to be able to invest at the right time to bring the highest possible return.
Do you see a positive recovery this time? Let us know your opinion and analysis.