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Thursday, January 27, 2022

Ether Drops Below $3,800, Traders Unwilling To Short

The Ether network saw an increase in their smart contract deposits but another descending channel continued to pressure its price.

Ether or ETH has reached an all-time high of $4,870 on the 10th of November but such bulls have little or no reason to be celebrated. The gains of 290% have been completely overshadowed by December’s 18% drop in prices. Ether’s network value which was locked in TVLs had still increased 9 times to $155 billion.

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When we look at the last few months’ price performance charts, we cannot tell the entire story. Ethereum’s present $450 billion market cap makes it one of the world’s leading tradable assets. It comes right after Johnson & Johnson.

The year 2021 would be remembered by the decentralized exchanges’ sheer growth, whose daily volume reached $3 billion, a 340% growth versus the last quarter of 2020. Still, crypto traders are notoriously short-sighted, accentuating the impact of the ongoing downtrend channel.

Ether News: The Markets Are Not Reflecting Panic Sells

In order to check if the bearishness had been instilled, people must analyze the funding rate of the futures. The inverse swaps have a rate that is embedded which changed every 8 hours. Such measures are established to avoid exchange risk imbalances. A positive funding rate indicates that longs demand more leverage.

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However, the opposite situation occurs when shorts require additional leverage, and this causes the funding rate to turn negative.

Despite Ether’s 9% correction since December 24, top traders on Binance, Huobi, and OKEx have increased their leverage longs. 

To increase their precision, Binance was the only exchange facing a modest reduction in the top traders’ long-to-short ratio. The figure moved from 0.98 to 0.92. However, this impact was more than compensated by OKEx traders increasing their bullish bets from 1.67 to 3.20 in one week.

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