{"id":288151,"date":"2021-05-01T11:10:53","date_gmt":"2021-05-01T15:10:53","guid":{"rendered":"https:\/\/insidebitcoins.com\/?p=288151"},"modified":"2021-05-01T11:10:53","modified_gmt":"2021-05-01T15:10:53","slug":"2-critical-eth-price-metrics-show-pro-traders-are-boosting-value","status":"publish","type":"post","link":"https:\/\/insidebitcoins.com\/news\/2-critical-eth-price-metrics-show-pro-traders-are-boosting-value","title":{"rendered":"2 Critical ETH Price Metrics Show Pro Traders are Boosting Value"},"content":{"rendered":"
Futures open interest for Ethereum hit a record of $8.5 billion. Pro traders believe that ETH will reach a new high of $3500 soon.<\/p>\n
On April 29, Ether (ETH)<\/a> reached an all-time high of $2800. This growth also pushed the interest of the open future for the crypto, with the new figure standing at $8.5 billion. This is a 52% growth, which depicts an increase in trading activity contributing to the price hike.<\/p>\n Ether derivatives are not very popular with analysts and traders. CME Group<\/a>, a futures and trading option, only has $355 million in open interest, although it was launched a few months back. This is a small figure compared to Bitcoin\u2019s open interest, which stands at $2.4 billion.<\/p>\n Analysts believe that Ethereum is not yet in a bullish state. There are factors used to evaluate whether a market is shifting to a bullish state. The main factor used is a futures premium, which measures a price gap between future contracts and current market prices.<\/p>\n If an asset is in a bullish state, the futures premium should be 10% to 20%. This is known as a lending rate. ETHs futures premium for April stood at 45%. This is too high, which could be a sign of too much optimism.<\/p>\n <\/a><\/p>\n Professional traders usually go for monthly futures contracts, while on the other hand, retail investors go for perpetual contracts or inverse swaps. With perpetual contracts, retail investors<\/a> are charged a funding rate after every 8 hours. The funding rate increases every time buyers on long speculation leverage for higher and their accounts are charged regularly.<\/p>\n When retail-trading activities are incredibly high, the funding rate can increase to a maximum of 5.5% every week. In mid-April, the 8-hour funding rate for perpetual contracts reached around 3.8% per week. This high fee caused higher optimism for monthly futures. However, the funding rate has been corrected, and it has now gone back to the standard rate.<\/p>\n The increase in the funding rate in mid-April shows that retail investors are less bullish on Ether than professional traders<\/a>. The 3-month futures basis currently stands at 25% annualized. This is relatively higher compared to other similar platforms. This means that buyers who want to speculate for the long term are now more willing to make a premium payment to maintain their open positions.<\/p>\n","protected":false},"excerpt":{"rendered":"Not yet a Bullish trend<\/h2>\n
Professional Traders are more bullish than Retail Investors<\/h2>\n