Ether (ETH) price has been unable to close above $1,400 for the past 29 days, trading in a relatively tight $150 range. At the moment, it seems difficult to break out of the $1,250 support and $1,400 resistance, but two months ago, Ether was trading at $2,000. Ether’s current price range reflects the volatility of cryptocurrencies.
On the one hand, investors are calm as Ether is trading 50% above the intraday low of $880 on June 18. But despite the most exciting upgrade in the network’s seven-year history, prices are still down 65% year-to-date.
More importantly, Ethereum’s biggest rival, the BNB chain, was hit with a cross-chain security exploit on October 6th. Due to the $568 million abuse, the BNB smart chain has temporarily suspended all transactions on the network and has $5.4 billion in smart contract deposits.
Despite a 9% increase in TVL on Ethereum since September, Ether has outperformed competing smart contract tokens such as Binance Chain’s BNB (BNB), Cardano’s ADA (ADA), and Solana’s (SOL). It underperformed Network Coin by 14%. This suggests that problems with the Ethereum network, such as an average transaction fee of $3, have weighed on his ETH price.
Traders should review Ether derivatives market data to understand how whales and market makers are positioned.
Options Traders Still Moderately Risk-Averse
A 25% delta skew is a telltale sign whenever a professional trader overcharges for upside or downside protection. For example, if a trader expects the price of Ether to crash, the options market strain indicator will exceed 12% for him. On the other hand, generalized excitement reflects a negative 12% bias.
In layman’s terms, the higher the index, the less likely traders are to offer downside risk protection. This indicator shows his fears since September 19, when he last fell below 10%. The day marked a temporary bottom of the 28% weekly correction as the $1,250 support strengthened after such a test.
Long to short data shows traders are adding long
The net long-to-short ratio for top traders excludes externalities that may have impacted the options market alone. Aggregating spot, perpetual and quarterly futures contract positions gives professional traders a better understanding of whether they are bullish or bearish.
Viewers should monitor changes rather than absolute numbers, as there are occasional methodological discrepancies between different exchanges.
Binance showed a slight increase in the ratio of longs to shorts from October 13th to 17th, with the metric moving from 1.04 to 1.07 over the past four days. Therefore, these traders increased their bullish bets slightly.
Huobi’s data show a stable pattern, with the long-to-short indicator consistently hovering around 0.98. Finally, on the OKX exchange, the metric favored mostly shorts as he plummeted to 0.72 on Oct. 13 and now he’s only to recover to 1.00.
On average, according to the long-to-short indicator, the top traders on these three exchanges have increased their long positions since the October 13 support test at $1,200.
Skew and leverage are key to sustaining $1,250 support
Despite a 12% rise in Ether since the Oct. 13 crash to $1,185, professional traders’ derivatives positions have not improved significantly. In addition, options his traders fear remain a chance below $1,250 given that the skew indicator remains above his 10% threshold.
If these whales and market makers had a firm belief in sharp price corrections, it would have been reflected in the long-to-short ratios of top traders.
Investors should monitor both indicators closely. The 25% delta skew stays at 18% and the long-to-short ratio needs to rise above 0.80 to hold the strength of the $1,250 support. These indicators are a clear indication of whether bearish sentiment from top traders is gaining momentum.
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