ETH’s price is hovering at a key support level and although it is on the decline, data shows professional traders are reluctant to sell.
Ether
Ethereum

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1117 dollars

From November 10th to November 15th, it remained in the $1,170 – $1,350 range, which is a relatively narrow 15% range. During this time, investors continue to digest the negative impact of FTX’s November 11 Chapter 11 bankruptcy filing.

Meanwhile, the total Ethereum market cap was 57% higher than the previous week at $4.04 billion daily. The data is even more relevant given the collapse of Alameda Research, the arbitrage and market-making firm controlled by FTX founder Sam Bankman-Freed.

On a monthly basis, Ethereum’s current $1,250 level represents a modest 4.4% drop, so traders are looking for FTX and FTX for a 74% drop from the all-time high of $4,811 in November 2021. Can’t blame Alameda Research.

Contagion risks have caused investors to empty the wallets of centralized exchanges, while this move has resulted in an increase in decentralized exchange (DEX) activity. Uniswap, 1inch Network and SushiSwap have seen a 22% increase in active addresses since Nov.

Let’s take a look at derivative metrics to better understand how professional traders position themselves in current market conditions.

Leveraged markets show no signs of distress
Margin trading allows investors to borrow cryptocurrencies to take advantage of their trading positions, potentially increasing their profits. For example, you can buy ether by borrowing Tether.
USDT

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$1.00

thus increasing crypto risks. On the other hand, borrowing Ether can only be used to sell or bet on a price cut.

Unlike futures contracts, the balance between margin long and short trades is not necessarily matched. When the margin lending ratio is high, it indicates that the market is bullish; conversely, a low lending rate indicates that the market is trending downward.

Margin Lending Rate OKX USDT/ETH. Source: OKH
The chart above shows investor morale peaking on Nov. 13, when the ratio hit a two-month high of 5.7. However, since then OKX traders have placed fewer bets on the uptrend as the indicator has dropped to the current 4.0 level.

However, the current lending rate is rising in absolute terms, supporting stablecoin borrowing by a wide margin. It is worth emphasizing that the overall mood has improved since November 8, as traders increase demand for margin long positions using stablecoins.

Related: Genesis Global Suspends Withdrawals Due to ‘Unprecedented Market Turmoil’

Data on long and short positions show that the demand for leveraged long positions is decreasing.
The net long-short ratio of top traders only excludes external factors that may have affected leveraged markets. By collecting spot positions, perpetual and quarterly futures contracts, analysts can better understand whether professional traders are bullish or bearish.

Sometimes methodological inconsistencies arise between different exchanges, so viewers should track changes, not absolute numbers.

The ratio of the long and short positions of the ether of the leading traders of the exchanges. Source: Coin glass
The long/short ratio on Huobi was 0.98 between November 8 and November 15, indicating a balanced situation between leveraged buyers and sellers. On the other hand, Binance traders initially experienced a deep decline in demand for long positions, but this move has been completely suppressed as buying activity has dominated since November 11.

On the OKX exchange, the indicator dropped from 1.30 on 8 November to the current 0.81 in favor of short positions. Thus, according to the long-short indicator, leading traders significantly reduced their long positions until November 10, but continued to increase their long positions thereafter.

In terms of derivative analysis, neither futures nor margin markets show excessive demand for short positions. If panic prevails, deterioration in Ethereum lending conditions and long and short position indicators can be expected.

Therefore, the bulls are in control as traders hesitate to enter bearish positions when ETH is below $1,300.

Source: CoinTelegraph

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