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Ethereum May Soon Pop Higher After 30% Drop

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  • Ethereum may be poised to move higher after dropping 30% from last month’s highs.
  • Futures data shows that investors are currently bearish on the cryptocurrency, which should lend to a potential short squeeze.

Ethereum Could Soon Surge to the Upside: Futures Trend

Crucial futures data suggests that Ethereum may soon revert to the upside, not move lower.

One crypto-asset analyst recently shared the data below, which shows the positioning of ETH futures traders on Binance. The data is from HyBlock Capital, a crypto-asset derivatives data firm.

The data shows that the aggregate Ethereum trader on Binance’s futures trading platform is currently positioned extremely bearish.

For instance, the funding rate of Binance’s ETH market is currently negative, which only takes place 3-5% of the time. The rarity of the current market conditions, the trader who shared this data explains, suggests that the cryptocurrency will soon break higher.

Countintuiviely, low funding rates are often seen in the cryptocurrency market before a move higher as short positions are more easily squeezed out.

Chart of ETH's futures positioning data shared by crypto trader Byzantine General (@Byzgeneral on Twitter). Data from crypto data and analytics firm
Hyblock Capital.

Technicals Agree With Optimistic Outlook

The technical trends agree with the optimistic outlook depicted by futures trends. As reported by Bitcoinist previously, one trader said on the outlook of Ethereum on a macro scale:

“Personally with so much uncertainty in the market it is very possible we see a $300 region retest, that said honestly HTF structure is looking great, lots of EMA support below us… In 2018/2019 the 55 EMA was consistently resistance, price now trending well above!”

Ethereum

Chart of ETH's price action over the past few years with analysis by crypto trader Crypto Cactus (@TheCryptoCactus on Twitter). 
Chart from TradingView.com

This was echoed by Logan Han, a prominent trader on Binance’s futures market.

Image

Chart of ETH's price action over the past few years with analysis by crypto trader and leading Binance analyst Logan Han (@loganhan_ on Twitter). 
Chart from TradingView.com

Referencing the chart above, commented that he thinks the cryptocurrency is currently in a good position because it has formed a falling wedge pattern, which is suggestive of an imminent break to the upside.

Featured image from Shutterstock
Price tags: ethusd, ethbtc
Charts from TradingView.com
Binance Futures Trend: Ethereum May Soon Pop Higher After 30% Drop





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Ethereum

Ethereum investment products see largest weekly outflows on record — CoinShares

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Institutional investment managers continued to sell cryptocurrencies like Bitcoin (BTC) and Ether (ETH) last week, though the magnitude of the outflows have declined substantially from previous weeks, offering early signs that the worst of the market sell-off has subsided. 

CoinShares’ weekly fund flows report showed a $21.4 million drawdown over the previous seven days, compared with a $94 million outflow the previous week. Ether products registered their biggest weekly drawdown at $12.7 million. Funds dedicated to ETH had been outperforming Bitcoin in recent months, reflecting pent-up demand for the second-largest cryptocurrency.

All said, institutional investors have been net sellers of digital assets in four of the past five weeks. The period ending May 24 saw the biggest weekly outflow at $97 million, according to CoinShares data.

Related: Record $141M outflow from Bitcoin products signals institutions are bearish on BTC: CoinShares

“While sentiment has weakened over the last month investors on the whole remain committed given the magnitude of inflows seen this year,” the report says, alluding to the fact that crypto investment funds have raised $5.8 billion this year alone. That’s within 13% of the $6.7 billion inflows registered in all of 2020.

As Cointelegraph reported, crypto holdings among institutional managers reached record levels during the height of the bull market earlier this year. Naturally, many investors have been taking profits following the most recent bout of market volatility.

Nevertheless, the weekly fund flows report suggests market sentiment is gradually improving. Case in point: The Bitcoin Fear & Greed Index has rebounded from extreme lows despite remaining on the bearish side. Meanwhile, Bitcoin’s price pierced above $41,000 on Monday, marking a 12% gain as markets eyed recovery above key technical levels. The price of Ether also recovered 9% to hit $2,566.