Oh where, oh where have Ethereum bulls gone? Sub-$4K ETH fails to entice traders

Oh where, oh where have Ethereum bulls gone? Sub-$4K ETH fails to entice traders

Cryptocurrency price corrected sharply today, including Ether (ETH), but this is a short-term move which is not reflective of the more macro-level events which still paint a bullish picture for assets like Ether and Bitcoin.

In the last 30 days, Ether price gained 96%, moving from $2,138 to $4,200 on May 11. Normally the assumption would be that every trader is consumed with euphoria and this would be seen in the funding rate reaching record highs on Ether futures contracts but at the moment this is not the case.

Our top trading bots

The funding rate appears to have flatlined on April 18 and at the moment it seems that there's nothing that can be done to re-ignite buyers' leverage.

Oh where, oh where have Ethereum bulls gone? Sub-$4K ETH fails to entice traders
Ether token-margined perpetual futures 8-hour funding rate. Source: Bybt

Take notice of how the cost for longs (buyers) to carry open positions on Feb. 20 reached 0.20% per 8-hour, equivalent to 4.3% per week. A 74% price hike in 30 days fueled that situation as Ether tried to break the $2,000 resistance.

More recently, a similar situation took place on April 3 after Ether rallied 43% to a $2,150 all-time high. Movements like these typically mark retail traders' excessive use of leverage. Meanwhile, whales and arbitrage desks open longs using the fixed-month future contracts to avoid the funding rate oscillations.

The 19% negative price swing on April 17 caused $1 billion long futures contracts liquidations. That event crushed bulls' morale also impacted their confidence in building leveraged-long positions.

Top traders also lack confidence

Typically retail traders are more inclined to take a longer time to recover from unexpected losses, but this time around, pro traders also lack conviction despite the rally.

The top traders' long-to-short net positioning is calculated by analyzing the consolidated positions on the spot, perpetual and futures contracts, providing a clearer view of whether professional traders are leaning bullish or bearish.

With this in mind, there are occasional discrepancies in the methodologies between different exchanges, so viewers should monitor changes instead of absolute figures.

Oh where, oh where have Ethereum bulls gone? Sub-$4K ETH fails to entice traders
Exchange’s top traders ETH long-to-short ratio. Source: Bybt

Despite the $4,380 all-time high on May 12, these top traders are nowhere near the highest long-to-short ratio. OKEx presents the most drastic change as the indicator reached 0.97 on April 18 and has since declined to 0.50, meaning top traders are 2:1 net short.

Binance top traders long-to-short oscillated between 0.86 and 0.95 over the past thirty days, and the indicator currently stands at 0.89. That should be interpreted as a 'neutral' position, which seems odd considering the 96% rally during this period.

Lastly, Huobi's top traders' leverage indicator peaked on May 4 at 1.00, indicating a balanced situation between longs and shorts. However, it currently stands at 0.95, therefore signaling a lack of excitement.

Bitcoin's price action could be the reason

It's no secret that Bitcoin (BTC) movements dictate traders' general feelings, even if it means cheering for its price to stabilize near $55,000.

Posts like these can be found all over Twitter and in a way, they confirm that investors expect altcoins to crash if Bitcoin moves below $50,000. This may be the primary reason for the lack of confidence in Ether longs.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Read on relating to Cointelegraph
Solana Labs raises $314M via private token sale as ecosystem support expands
Cryptocurrency venture capital funds have poured hundreds of millions of dollars into Solana Labs to support further development and execution of decentralized...
Layer 2 network Arbitrum ships guarded launch, attracts major DeFi protocols
In a landscape of so-called scaling solutions primarily composed of sidechains and EMV-enabled competitors, one widely anticipated “rollup” layer 2 sidechain...
EOS Falls 14% In Bearish Trade
Investing.com - EOS was trading at $5.5809 by 20:49 (00:49 GMT) on the Investing.com Index on Sunday, down 14.02% on the day. It was the largest one-day...
Swiss Sygnum Bank to offer custody for Internet Computer token
Switzerland-based cryptocurrency bank Sygnum is launching custody and banking services for Internet Computer (ICP) utility tokens.Sygnum announced on Tuesday...
Bitcoin price metric flashes rare ‘buy the dip’ opportunity at $42K lows
Bitcoin (BTC) is facing a make-or-break moment this week as a classic indicator signals a price watershed. According to the network value to transaction...
Investors' on-chain activity hints at Bitcoin price cycle top above $166,000
After breaking out of the two-months ascending triangle, the price of Bitcoin (BTC) is firmly staying above $60,000. Current on-chain volume suggests investors...
XRP Climbs 47% As Investors Gain Confidence
Investing.com - XRP was trading at $0.91564 by 20:04 (00:04 GMT) on the Investing.com Index on Tuesday, up 47.23% on the day. It was the largest one-day...
The blacklist: Marathon only mining ‘fully compliant’ Bitcoin transactions
Major U.S.-based mining firm Marathon Digital Holdings has announced the launch of what it describes as the first North American Bitcoin mining pool that...
CME Group set to launch Micro Bitcoin futures
The Chicago Mercantile Exchange, or CME, has unveiled plans to launch a new Bitcoin (BTC) derivatives product that will enable traders to speculate on fractional...
Vitalik Buterin: NFTs can be a social good, not just a casino for rich celebrities
Ethereum co-creator Vitalik Buterin believes NFTs can be applied to socially relevant causes such as charities and funding public goods, but not while the...
Microsoft reportedly polling Xbox users about Bitcoin payment option
Tech giant Microsoft seems to be considering introducing Bitcoin (BTC) payments at its Xbox gaming console online store.According to a March 21 Reddit post...
Square Got License to Trade Cryptos in New York, Letting Bitcoin Soar
Cash App, a person-to-person payments service, can now be used by New Yorkers to trade cyber coins. The app is a small business service provided by a financial...
Venezuela Adopts Decree on Cryptos And Petro
Last week the Constituent National Assembly (CNA), which was chosen a previous year to draught a novel law for the nation in order to suit Nicolas Maduro’s...
LavkaLavka Attracted $16 Million On ICO
LavkaLavka Moscow farm cooperative LavkaLavka attracted more than $16 million on the ICO, which took place from January 1 to February 18, 2018. Thus,...
Sweden May Issue Own Crypto As Asian States Get Firm On Bitcoin
Twists and turns in the field of crypto regulation remain unabated. As Sweden can become a pioneer in launching its virtual coin, several Asian countries...