{"id":446070,"date":"2022-05-13T00:15:00","date_gmt":"2022-05-12T21:15:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/look-out-below-ethereum-derivatives-data-hints-at-further-downside-from-eth\/"},"modified":"2022-05-13T00:15:00","modified_gmt":"2022-05-12T21:15:00","slug":"look-out-below-ethereum-derivatives-data-hints-at-further-downside-from-eth","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/look-out-below-ethereum-derivatives-data-hints-at-further-downside-from-eth\/","title":{"rendered":"# Look out below! Ethereum derivatives data hints at further downside from ETH"},"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-6a27e29bb5d56\" 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-6a27e29bb5d56\" 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\/look-out-below-ethereum-derivatives-data-hints-at-further-downside-from-eth\/#%E2%80%9D_Look_out_below_Ethereum_derivatives_data_hints_at_further_downside_from_ETH_%E2%80%9C\" >&#8221; Look out below! Ethereum derivatives data hints at further downside from ETH &#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\/look-out-below-ethereum-derivatives-data-hints-at-further-downside-from-eth\/#Options_traders_are_unwilling_to_offer_downside_protection\" >Options traders are unwilling to offer downside protection<\/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\/look-out-below-ethereum-derivatives-data-hints-at-further-downside-from-eth\/#Long-to-short_data_confirms_traders_are_avoiding_risk\" >Long-to-short data confirms traders are avoiding risk<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Look_out_below_Ethereum_derivatives_data_hints_at_further_downside_from_ETH_%E2%80%9C\"><\/span>&#8221; Look out below! Ethereum derivatives data hints at further downside from ETH &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>Ether (ETH) is down 38% in three weeks and the current $2,000 level is 59% below the $4,870 all-time high that was reached in November 2021. Additional <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>flow that added to the current market wide volatility were the bankruptcy fears that emerged after Coinbase, the largest U.S. exchange reported a $430 million first-quarter 2022 loss.\u00a0<\/p>\n<p>In the most recent 10-Q filing Coinbase included the following disclosure: <\/p>\n<blockquote><p>&#8220;In the event of a bankruptcy, the crypto assets we hold on behalf of our customers may be subject to bankruptcy proceedings.&#8221;<\/p><\/blockquote>\n<p>Regulatory uncertainty was also partially responsible for Ether\u2019s sharp correction. On May 11, Kukmin, a South Korea-based newspaper, reported a leaked draft of the upcoming governmental &#8220;Digital Asset Basic Act (DABA)&#8221; bill. The administration of South Korea expects to introduce a regulatory framework for initial coin offerings (ICOs), along with a 20% tax on crypto gains above $2,100 per year.<\/p>\n<p>Another factor impacting markets is investors&#8217; confidence in stablecoins. On May 11, USD Tether (USDT), the largest stablecoin by market capitalization, broke below its peg, and traded under $0.99 on major exchanges. However, Tether and Bitfinex chief <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> officer Paulo Ardoino highlighted that USDT has maintained its stability through multiple black swan events and &#8220;continues to process redemptions normally.&#8221;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Options_traders_are_unwilling_to_offer_downside_protection\"><\/span>Options traders are unwilling to offer downside protection<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To understand how larger-sized traders are positioned, one should look at Ether&#8217;s futures and options market data. The 25% delta skew is a telling sign whenever arbitrage desks and market makers overcharge for upside or downside protection.<\/p>\n<p>If those traders fear an Ether price crash, the skew indicator will move above 10%. On the other hand, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ized excitement reflects a negative 10% skew. That is precisely why the metric is known as the pro traders&#8217; fear and greed metric.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-05\/de30b8bd-f1d7-4312-9e5a-2e3a3586ee97.png\"><figcaption style=\"text-align: center;\"><em>Ether 30-day options 25% delta skew: Source: Laevitas.ch<\/em><\/figcaption><\/figure>\n<p>The skew indicator has been above 10% since April 23 and it skyrocketed to a 29% peak on May 12. In addition to signaling extreme fear from options traders, the metric has reached the highest level ever registered.<\/p>\n<p>The past three weeks showed a remarkable sentiment deterioration and the current 27% delta skew shows a clear unbalanced risk for unexpected upward and downward price swings.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Untethered &#8211; Here\u2019s everything you need to know about TerraUSD, Tether and other stablecoins<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Long-to-short_data_confirms_traders_are_avoiding_risk\"><\/span>Long-to-short data confirms traders are avoiding risk<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 specific derivatives instruments. By analyzing these top clients&#8217; positions on the spot, perpetual and futures contracts, one can better understand whether professional traders are leaning bullish or bearish.<\/p>\n<p>There are occasional methodological discrepancies between different exchanges, so viewers should monitor changes instead of absolute figures.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-05\/2fe2fe2f-016a-45c0-a3be-7f4d3c29510c.png\"><figcaption style=\"text-align: center;\"><em>Exchanges&#8217; top traders Ether long-to-short ratio. Source: Coinglass<\/em><\/figcaption><\/figure>\n<p>Even though Ether plunged 29% since March 11 to a $1,700 low, professional traders reduced their bullish bets according to the long-to-short indicator. OKX&#8217;s top traders&#8217; ratio decreased from 1.25 to the current 0.85 level. <\/p>\n<p>Binance data also shows these traders reducing their longs from 1.03 to 0.98, while at Huobi it stood unchanged at 1.00. This signals that there has been hardly any buying activity from whales and market makers amid the sharp correction in Ether price.<\/p>\n<p>There is simply no way to sugarcoat Ether&#8217;s current derivatives data because both indicators reflect a lack of confidence from professional investors. The option traders overcharging for downside protection suggests that Ether can go below $1,700 according to risk metrics.<\/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>\n<\/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 News 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\/look-out-below-ethereum-derivatives-data-hints-at-further-downside-from-eth\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Look out below! Ethereum derivatives data hints at further downside from ETH &#8220; Ether (ETH) is down 38% in three weeks and the current $2,000 level is 59% below the $4,870 all-time high that was reached in November 2021. Additional newsflow that added to the current market wide volatility were the bankruptcy fears that&#8230;<\/p>\n","protected":false},"author":1,"featured_media":446071,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvYjg2OTRiMzAtMTIwNC00NGMxLWEyZGMtNWZhYzM3ZGUzMzkyLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74863,74860,75012,82402,74891,81210,74938,75846,3123,73785,72420,36041],"class_list":["post-446070","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-ether-price","tag-ethereum","tag-ethereum-options","tag-ethereum-price","tag-futures","tag-leverage","tag-markets","tag-south-korea","tag-tether"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/446070","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=446070"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/446070\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/446071"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=446070"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=446070"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=446070"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}