ETH’s 13% drop to $4,100 led to $200 million in futures liquidations, but pro traders still have reason to stay long and strong. Ether (ETH) traders might have a few reasons to panic after today's 13% drop down to $4,100. The swift pullback appears to have broken a 55-day ascending channel that had a target at $5,500. Those not worried about technical analysis will understand that the cryptocurrency's 3.4% daily volatility justifies the 10% negative price swing. Still, one should not disregard externalities such as the United States infrastructure bill approval on Monday.
The legislation requires that digital asset transactions worth more than $10,000 are reported to the Internal Revenue Service. It remains unknown whether that will be applied to individuals and businesses developing blockchain technology and wallets.
Furthermore, on Nov. 12, the United States Securities and Exchange Commission officially denied VanEck's spot Bitcoin exchange-traded fund application request. The regulator cited "fraudulent and manipulative acts and practices," along with the lack of transparency on Tether’s (USDT) stablecoin.
The unexpected ETH price move triggered $200 million worth of leveraged long futures contract liquidations but the open interest on Ether's futures markets is still healthy. Notice how the current $11.9 billion still in place for perpetual and quarterly futures contracts is 37% higher from two months ago. However, the number of leverage longs (buy) and shorts (sell) are matched at all times in any derivatives contract.
To determine whether professional traders are leaning bearish, one should start by analyzing the futures premium — also known as the basis rate. This indicator measures the price gap between futures contract prices and the regular spot market. Ether's quarterly futures are the preferred instruments of whales and arbitrage desks. Even though derivatives might seem complicated for retail traders due to their settlement date and price difference from spot markets, the most significant advantage is the lack of a fluctuating funding rate.
The three-month futures typically trade with a 5% to 15% annualized premium, which is deemed an opportunity cost for arbitrage trading. By postponing settlement, sellers demand a higher price, and this causes the price difference. As depicted above, Ether's surge past $4,000 on Oct. 21 caused the basis rate to touch the 20% level, which marks some excessive leverage from buyers. After three weeks ranging between 14% and 20%, the indicator dropped to the current 12%.
Although the basis rate remains neutral-to-bullish, it signals that some buyers' excess heat was terminated, which is essentially a healthy cleansing. Considering the drastic image portrayed by the ascending channel break, Ether traders should consider derivatives' data as a brief cool off period.
|#||Crypto||Prediction||Accuracy||CVIX||Price||24h||7d||Market Cap||7d price change|
|1||BTC||Bitcoin predictions||90.8%||9||$27 072.74||-0.31%||-0.57%||$524 998 864 858|
|2||ETH||Ethereum predictions||90%||5||$1 894.87||-0.29%||2.21%||$227 827 686 185|
|3||USDT||Tether predictions||95.6%||1||$1.000237||-0.01%||-0.01%||$83 172 174 121|
|4||BNB||Binance Coin predictions||91.2%||3||$306.06||-0.12%||-0.96%||$47 701 185 151|
|5||USDC||USD Coin predictions||96%||1||$0.999884||-0.01%||-0.02%||$28 901 071 500|
|6||XRP||XRP predictions||74.4%||45||$0.522198||-0.25%||10.27%||$27 147 495 980|
|7||ADA||Cardano predictions||90%||5||$0.378860||0.52%||1.56%||$13 220 010 862|
|8||STETH||Lido stETH predictions||96%||1||$2 941.39||-0.40%||-3.32%||$10 258 752 564|
|9||DOGE||Dogecoin predictions||90%||10||$0.072655||0.32%||-0.38%||$10 144 189 079|
|10||SOL||Solana predictions||83.6%||26||$21.27||0.60%||3.64%||$8 443 365 511|
|11||MATIC||Polygon predictions||85.6%||24||$0.903134||0.55%||-2.81%||$8 380 602 516|
|12||WTRX||Wrapped TRON predictions||74.8%||41||$0.081699||-2.02%||5.66%||$8 306 858 508|
|13||TRX||TRON predictions||78.4%||46||$0.081792||-2.14%||5.52%||$7 377 081 997|
|14||LTC||Litecoin predictions||76.4%||43||$95.39||0.78%||5.98%||$6 970 331 292|
|15||DOT||Polkadot predictions||92.4%||7||$5.34||1.40%||-0.79%||$6 358 029 850|
Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.
© 2015-2023 Crypto-Rating.com
The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.