bitcoin
Bitcoin (BTC) $ 17,219.03
ethereum
Ethereum (ETH) $ 1,292.09
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 295.08
usd-coin
USD Coin (USDC) $ 0.999389
binance-usd
Binance USD (BUSD) $ 1.00
xrp
XRP (XRP) $ 0.393480
dogecoin
Dogecoin (DOGE) $ 0.104529
cardano
Cardano (ADA) $ 0.325397
matic-network
Polygon (MATIC) $ 0.930391
polkadot
Polkadot (DOT) $ 5.69
staked-ether
Lido Staked Ether (STETH) $ 1,277.77
litecoin
Litecoin (LTC) $ 78.46
shiba-inu
Shiba Inu (SHIB) $ 0.000009
okb
OKB (OKB) $ 21.94
dai
Dai (DAI) $ 1.00
solana
Solana (SOL) $ 13.95
tron
TRON (TRX) $ 0.053340
uniswap
Uniswap (UNI) $ 6.33
avalanche-2
Avalanche (AVAX) $ 14.17
chainlink
Chainlink (LINK) $ 7.53
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 17,141.30
leo-token
LEO Token (LEO) $ 3.79
cosmos
Cosmos Hub (ATOM) $ 10.47
ethereum-classic
Ethereum Classic (ETC) $ 19.73
the-open-network
The Open Network (TON) $ 1.81
monero
Monero (XMR) $ 144.13
stellar
Stellar (XLM) $ 0.088243
bitcoin-cash
Bitcoin Cash (BCH) $ 112.03
quant-network
Quant (QNT) $ 130.31
crypto-com-chain
Cronos (CRO) $ 0.073677
algorand
Algorand (ALGO) $ 0.245032
filecoin
Filecoin (FIL) $ 4.59
apecoin
ApeCoin (APE) $ 4.19
near
NEAR Protocol (NEAR) $ 1.75
vechain
VeChain (VET) $ 0.019416
internet-computer
Internet Computer (ICP) $ 4.46
hedera-hashgraph
Hedera (HBAR) $ 0.048769
flow
Flow (FLOW) $ 1.14
terra-luna
Terra Luna Classic (LUNC) $ 0.000177
elrond-erd-2
MultiversX (Elrond) (EGLD) $ 43.45
eos
EOS (EOS) $ 0.938445
frax
Frax (FRAX) $ 0.997864
trust-wallet-token
Trust Wallet (TWT) $ 2.42
the-sandbox
The Sandbox (SAND) $ 0.597676
tezos
Tezos (XTZ) $ 1.02
aave
Aave (AAVE) $ 65.50
chiliz
Chiliz (CHZ) $ 0.169081
theta-token
Theta Network (THETA) $ 0.898139
huobi-token
Huobi (HT) $ 6.81

Ethereum bears have the upper hand according to derivatives data, but for how long?

0

Ether (ETH) price experienced an 11.9% decline from Nov. 20 to Nov. 22, bottoming at $1,074 — the lowest level seen since July. Currently, investors have reason to be concerned after crypto lending company Genesis reportedly faced difficulties raising money, triggering rumors of insolvency on Nov. 21. 

However, a spokesperson for Genesis told Cointelegraph that there were no plans for imminent bankruptcy because the company continues to hold discussions with its creditors.

Unease about the centralization of decentralized finance (DeFi) surfaced after Uniswap Labs changed the privacy policy on Nov. 17, revealing that it collects publicly-available blockchain data, users’ browser information, operating systems data and interactions with its service providers.

Adding to the fracas, the hacker behind the FTX exchange theft of $447 million has been spotted moving their Ether funds. On Nov. 20, the attacker transferred 50,000 ETH to a separate wallet and converted it to Bitcoin using two renBTC bridges.

Traders fear that the hacker might be suppressing Ether’s price to profit using leveraged short bets. The rumor was raised by @kundunsan on Nov. 15, even though the Twitter post did not gain exposure.

Let’s look at Ether derivatives data to understand if the worsening market conditions have impacted crypto investors’ sentiment.

Pro traders have been in panic mode since Nov. 10

Retail traders usually avoid quarterly futures due to their price difference from spot markets, but they are professional traders’ preferred instruments because they prevent the fluctuation of funding rates that often occurs in a perpetual futures contract.

Ether 2-month futures annualized premium. Source: Laevitas.ch

The three-month futures annualized premium should trade between +4% to +8% in healthy markets to cover costs and associated risks. The chart above shows that derivatives traders have been bearish since Nov. 10 since the Ether futures premium was negative.

Currently there is backwardation in the contracts and this situation is atypical and usually deemed bearish. The metric did not improve after ETH rallied 5% on Nov. 22, reflecting professional traders’ unwillingness to add leveraged long (bull) positions.

Traders should also analyze Ether’s options markets to exclude externalities specific to the futures instrument.

Options traders fear additional crashes

The 25% delta skew is a telling sign when market makers and arbitrage desks are overcharging for upside or downside protection.

In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 10%. On the other hand, bullish markets tend to drive the skew indicator below -10%, meaning the bearish put options are discounted.

Ether 60-day options 25% delta skew: Source: Laevitas.ch

The delta skew has been above the 10% threshold since Nov. 9, signaling that options traders were less inclined to offer downside protection. The situation worsened over the following days as the delta skew indicator surged above 20%.

The 60-day delta skew currently stands at 23%, so whales and market makers are pricing higher odds of price dumps for Ether. Consequently, derivatives data shows low confidence right as Ether struggles to hold the $1,100 support.

According to the data, Ether bulls should not throw in the towel just yet because these metrics tend to be backward-looking. The panic that followed FTX’s bankruptcy and the subsequent liquidity issues at Genesis might dissipate quickly if exchanges public proof of reserves and institutional investors addingBitcoin exposure during the dip are interpreted as positives by market participants.

With that said, at the moment Ether bears still have the upper hand according to ETH derivatives metrics.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Source link

Leave A Reply

Your email address will not be published.

Shares