On December 1, the price of Ether (ETH) briefly hit $ 4,760, which is an interesting investor and reminds the world that the altcoin is just 2.2% below its all-time high of $ 4,870 reached 20 days ago. While spot price movement can be exciting, let’s take a look at what’s happening in the ether derivatives markets.
Ether ETH / USD price on Bitstamp. Source: TradingView
While it is possible to subscribe to the descending channel showing support at $ 3,960, the positive 5.4% move on December 1 appears to be in contrast to the negative trend for Bitcoin (BTC).
Earlier in December, commodities and stocks were hit after the US Federal Reserve admitted inflation was more than a “temporary” trend and Federal Reserve Chairman Jerome Powell said the bank’s relaxed monetary policy could end earlier. than expected.
Retailers are not entirely sure
To understand how confident traders are in the recovery in ether prices, it is necessary to analyze the data on perpetual futures. This instrument is the preferred market for retail traders because the price tends to be in line with the regular spot markets.
In any futures trading, the long (buyers) and short (sellers) are always the same, but their impact is different. Thus, the exchanges will require the funding interest rate for the side that requires more leverage, and this commission is paid to the other side.
8 Hour Funding Rate for Perpetual Ether Futures. Source: Coinglass.com
Neutral markets typically show positive funding rates ranging from 0% to 0.03%, which translates to 0.6% per week. This indicates long positions are on the move, with data showing that retail traders have been largely neutral since November 4, with the most recent move above 0.07% on October 21.
Top traders cut their long positions
Stock data underscores the position of long-term and short-term traders. By analyzing each client’s position on spot, perpetual and futures contracts, one can better understand whether professional traders are prone to bullish or bearish sentiment.
There are sporadic inconsistencies in the methodologies of various exchanges, so viewers should be tracking changes, not absolute numbers.
The best ETH traders change their relationship from long to short. Source: Coinglass.com
Although Ether is up 17% in the past four days, major traders Huobi and OKEx have cut their long positions. The move was even more visible on OKEx as the index jumped from a 120% lead on November 25 to a meager 30% lead three days later.
So far, the data shows whale and arbitrage tables have long since lowered their exposure, while retailers remain skeptical of the recent rally.