{"id":430628,"date":"2022-04-12T22:30:22","date_gmt":"2022-04-12T19:30:22","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/ethereum-derivatives-data-shows-pro-traders-are-bearish-but-for-how-long\/"},"modified":"2022-04-12T22:30:22","modified_gmt":"2022-04-12T19:30:22","slug":"ethereum-derivatives-data-shows-pro-traders-are-bearish-but-for-how-long","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/ethereum-derivatives-data-shows-pro-traders-are-bearish-but-for-how-long\/","title":{"rendered":"# Ethereum derivatives data shows pro traders are bearish, but for how long?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2879e555da5\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2879e555da5\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-derivatives-data-shows-pro-traders-are-bearish-but-for-how-long\/#%E2%80%9D_Ethereum_derivatives_data_shows_pro_traders_are_bearish_but_for_how_long_%E2%80%9C\" >&#8221; Ethereum derivatives data shows pro traders are bearish, but for how long?  &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-derivatives-data-shows-pro-traders-are-bearish-but-for-how-long\/#The_futures_premium_is_back_to_bearish_levels\" >The futures premium is back to bearish levels<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-derivatives-data-shows-pro-traders-are-bearish-but-for-how-long\/#Long-to-short_data_confirms_worsening_conditions\" >Long-to-short data confirms worsening conditions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-derivatives-data-shows-pro-traders-are-bearish-but-for-how-long\/#Are_investors_and_users_abandoning_the_network\" >Are investors and users abandoning the network?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Ethereum_derivatives_data_shows_pro_traders_are_bearish_but_for_how_long_%E2%80%9C\"><\/span>&#8221; Ethereum derivatives data shows pro traders are bearish, but for how long?  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>Ether (ETH) lost the critical $3,000 psychological support level on April 11 after a 16% weekly negative performance. Bulls were definitively caught by surprise as $104 million in leveraged long futures got liquidated on April 11. Ether&#8217;s downturn also followed a decline in the total value locked (TVL) in Ethereum smart contracts.\u00a0<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-04\/17bf21ff-b9bd-4bf1-bc6c-3fc0526d0809.png\"><figcaption style=\"text-align: center;\"><em>Ethereum network TVL in ETH. Source: Defi Llama<\/em><\/figcaption><\/figure>\n<p>The metric peaked at 40.6 million Ether on Jan. 27, and has since dropped by 22%. This indicator could partially explain why Ether could not withstand the adversity brought by Bitcoin&#8217;s (BTC) 13% weekly negative move. <\/p>\n<p>However, the leading altcoin has catalysts of its own because Ethereum developers implemented the network&#8217;s first-ever &#8220;shadow fork&#8221; on April 11. The testnet update created an area for developers to stress-test their assumptions around the network&#8217;s complex shift to proof-of-stake. <\/p>\n<p>More importantly, one needs to analyze how professional traders are positioning themselves and there&#8217;s no better gauge than derivatives markets.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_futures_premium_is_back_to_bearish_levels\"><\/span>The futures premium is back to bearish levels<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To understand whether the current bearish trend reflects top traders&#8217; sentiment, one should analyze Ether&#8217;s futures contracts premium, also known as a &#8220;basis.&#8221; Unlike a perpetual contract, these fixed-calendar futures do not have a funding rate, so their price will differ vastly from regular spot exchanges.<\/p>\n<p>A trader can gauge the market sentiment by measuring the expense gap between futures and the regular spot market. A neutral market should present a 5% to 12% annualized premium (basis) as sellers request more money to withhold settlement longer.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-04\/7060c63f-d0bc-46dc-9913-908af3b6fa0d.png\"><figcaption style=\"text-align: center;\"><em>Ether 3-month futures premium. Source: laevitas.ch<\/em><\/figcaption><\/figure>\n<p>The above chart shows that Ether&#8217;s futures premium stood above the 5% neutral threshold between March 25 and April 6, but later weakened to 3%. This level is typically associated with fear or pessimism because futures market traders are reluctant to open leveraged long (buy) positions.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Long-to-short_data_confirms_worsening_conditions\"><\/span>Long-to-short data confirms worsening conditions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The top traders&#8217; long-to-short net ratio excludes externalities that might have impacted the longer-term futures instruments. By analyzing these whale positions on the spot, perpetual and futures contracts, one can better understand whether professionals effectively become bearish.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-04\/85e865d6-ca3d-4c6a-b28e-4bc7915220ea.png\"><figcaption style=\"text-align: center;\"><em>Exchanges&#8217; top traders Ether long-to-short ratio. Source: Coinglass<\/em><\/figcaption><\/figure>\n<p>Firstly, one should note the methodological discrepancies between different exchanges, so the absolute figures have lesser importance. Yet, since April 5, there has been a considerable decline in the long-to-short ratio of every major derivatives exchange.<\/p>\n<p>Data signals that whales have been increasing their bearish bets over the past week. For instance, the Binance whales held a 1.05 long-to-short ratio on April 5, but gradually reduced it to 0.88. Furthermore, the OKX top traders moved from a 2.11 favoring longs to the current 1.35. <\/p>\n<p><strong>Related: <\/strong><strong><em>Kava turns bullish as Ethereum Co-Chain launch initiates push toward EVM compatibility<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Are_investors_and_users_abandoning_the_network\"><\/span>Are investors and users abandoning the network?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>From the perspective of the metrics discussed above, there might not be an indicator pointing to extreme bearishness but the futures basis rate and the top traders&#8217; long-to-short ratio worsened over the past week.<\/p>\n<p>Furthermore, the TVL in Ethereum smart contracts signals a decline in use. The constant delays in the proof-of-stake migration could be pulling investors&#8217; attention away and driving decentralized finance (DeFi), gaming, and nonfungible (NFT) projects to competing networks. In turn, traders have been focusing their attention on more promising altcoins and consequently diminishing the demand for Ether.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/noshitcoins\"><em>author<\/em><\/a><em> 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.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/ethereum-derivatives-data-shows-pro-traders-are-bearish-but-for-how-long\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Ethereum derivatives data shows pro traders are bearish, but for how long? &#8220; Ether (ETH) lost the critical $3,000 psychological support level on April 11 after a 16% weekly negative performance. Bulls were definitively caught by surprise as $104 million in leveraged long futures got liquidated on April 11. Ether&#8217;s downturn also followed a&#8230;<\/p>\n","protected":false},"author":1,"featured_media":430629,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDQvNGUyYWEzNTAtYTkyYy00NGNmLTk0YmQtYjllMzIzNGEwMTY1LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74863,74860,74868,75012,82402,74891,74938,75846,74939,95118,74876,75434,73785],"class_list":["post-430628","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-defi","tag-derivatives","tag-ether-price","tag-ethereum","tag-ethereum-price","tag-futures","tag-market-analysis","tag-nft","tag-proof-of-stake","tag-smart-contracts","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/430628","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=430628"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/430628\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/430629"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=430628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=430628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=430628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}