Ethereum approaches a new ATH, but derivatives data reflects mixed emotions

Ethereum price appears en-route to a new all-time high, but data shows retail and pro investors are slightly skeptical about the current rally.

Today Ether (ETH) price briefly touched $4,760, exciting investors and reminding the world that the altcoin is a mere 2.2% below the $4,870 all-time high reached 20 days ago. While the spot price action might be intriguing, let’s see what’s happening in Ether’s derivatives markets.

Ether ETH/USD price at Bitstamp. Source: TradingView

While it is possible to draw a descending channel that shows support at $3,960, today’s 5.4% positive move seems decoupled from Bitcoin’s (BTC) negative performance.

Earlier today, commodities and stocks took a hit after the U.S. Federal Reserve acknowledged that inflation is more than just a “transitory” trend and Fed chair Jerome Powell said that the bank’s relaxed money policies could end sooner than anticipated.

Retail traders are not fully confident

To understand how confident traders are about Ether’s price recovery, one should analyze the perpetual contracts futures data. This instrument is the retail traders’ preferred market because its price tends to track the regular spot markets.

In any futures contract trade, longs (buyers) and shorts (sellers) are matched at all times, but their leverage varies. Consequently, exchanges will charge a funding rate to whichever side demands more leverage, and this fee is paid to the opposing side.

Ether perpetual futures 8-hour funding rate. Source: Coinglass.com

Neutral markets tend to display a 0% to 0.03% positive funding rate which is equivalent to 0.6% per week. This indicates that longs are the ones paying and data shows retail traders have been mostly neutral since Nov. 4 and the last move above 0.07% happened on Oct. 21.

Top traders have reduced their long positions

Exchange-provided data highlights traders’ long-to-short net positioning. By analyzing every client’s position on the spot, perpetual and futures contracts, one can better understand whether professional traders are leaning bullish or bearish.

There are occasional discrepancies in the methodologies between different exchanges, so viewers should monitor changes instead of absolute figures.

Exchanges top traders ETH long-to-short ratio. Source: Coinglass.com

Despite Ether’s 17% rally over the past four days, top traders at Huobi and OKEx decreased their longs. This move was even more evident at OKEx because the indicator made a drastic move from favoring bulls by 120% on Nov. 25 to a meager 30% advantage three days later.

Currently, data indicates that whales and arbitrage desks have reduced their long exposure, while retail traders remain suspicious of the recent bull run.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Wen moon? Data shows pro traders becoming more bullish on Bitcoin price

MicroStrategy’s purchase of 7,002 BTC might have helped boost Bitcoin price today, but derivatives data also shows that pro traders are becoming more bullish.

The $4,700 Bitcoin (BTC) price spike on Nov. 29 was likely a great relief for holders, but it seems premature to call the bottom according to derivative metrics. 

This should not come as a surprise because Bitcoin price is still 15% below the $69,000 all-time high set on Nov. 10. Just 15 days later, the cryptocurrency was testing the $53,500 support after an abrupt 22% correction.

Today’s trend reversal was possibly encouraged by MicroStrategy’s announcement that it had acquired 7,002 Bitcoin on Monday at an average price of $59,187 per coin. The listed company raised money by selling 571,001 shares between Oct. 1 and Nov. 29, raising a total of $414.4 million in cash.

More bullish news came after German stock market operator Deutsche Boerse announced the listing of the Invesco Physical Bitcoin exchange-traded note or ETN. The new product will trade under the ticker BTIC on Deutsche Boerse’s Xetra digital stock exchange.

Data shows pro traders are still neutral-to-bullish

To understand how bullish or bearish professional traders are positioned, one should analyze the futures basis rate. That indicator is also known as the futures premium, and it measures the difference between futures contracts and the current spot market at regular exchanges.

Bitcoin’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 notorious benefit is the lack of a fluctuating funding rate.

Bitcoin 3-month futures basis rate. Source: Laevitas.ch

The three-month futures typically trade with a 5%–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.

Notice the 9% bottom on Nov. 27, as Bitcoin tested the $56,500 support. Then, after Monday’s rally above $58,000, the indicator shifted back to a healthy 12%. Even with this movement, there is no sign of excitement, but none of the past few weeks could be described as a bearish period.

Related: Key data points suggest the crypto market’s short-term correction is over

Lending markets provide additional insight

Margin trading allows investors to borrow cryptocurrency to leverage their trading position, therefore increasing the returns. For example, one can buy Bitcoin by borrowing Tether (USDT), thus increasing the exposure. On the other hand, borrowing Bitcoin can only be used to short it or bet on the price decrease.

Unlike futures contracts, the balance between margin longs and shorts isn’t necessarily matched.

OKEx USDT/BTC margin lending ratio. Source: OKEx

When the margin lending ratio is high, it indicates that the market is bullish—the opposite, a low lending ratio signals that the market is bearish.

The chart above shows that traders have been borrowing more Bitcoin recently, because the ratio decreased from 21.9 on Nov. 26 to the current 11.3. However, the data leans bullish in absolute terms because the indicator favors stablecoin borrowing by a wide margin.

Derivatives data shows zero excitement from pro traders even as Bitcoin gained 9% from the $53,400 low on Nov. 28. Unlike retail traders, these experienced whales avoid FOMO, although the margin lending indicator shows signs of excessive optimism.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Back to back all-time highs from AVAX, ENJ and EGLD suggest it’s ‘altseason’

AVAX, ENJ and EGLD brush off the recent drop in BTC price by posting a fresh round of all-time highs.

Its been a rollercoaster week in the cryptocurrency market after volatility returned to shake up Bitcoin (BTC) price, pushing the digital asset to lows not seen since mid-October. 

As has happened frequently in the past, the drop in price of BTC was followed by a rotation into altcoins and the Altseason Indicator from Cointelegraph Markets Pro suggests that the current market conditions are similar to those seen in the past when altcoins outperformed Bitcoin.

Altseason indicator. Source: Cointelegraph Markets Pro

Here’s a look at a few altcoins that have been making steady gains over the past few weeks.

Avalanche’s DeFi ecosystem explodes

Avalanche (AVAX) is a layer-one blockchain protocol that has risen in popularity over the course of 2021 as its decentralized finance (DeFi) and nonfungible token (NFT) ecosystems have grown, thanks in part to the low-fee nature of the protocol attracting users and liquidity from Ethereum.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for AVAX on Nov. 5, prior to the recent price rise.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. AVAX price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for AVAX began to pick up on Nov. 5 and reached a high of 83, just as the price of AVAX began to increase by 54.76% over the next two weeks.

The climbing price of AVAX comes as the DeFi ecosystem on Avalanche saw its total total value locked on the network rise to new highs and this week Binance US announced plans to list the token.

Enjin aims for a Polkadot parachain slot

Enjin (ENJ) is a protocol that operates on the Ethereum (ETH) network and focuses on the creation of blockchain-based gaming products and nonfungible tokens.

Data from Cointelegraph Markets Pro and TradingView shows that since hitting a low of $1.19 on Sept. 29, the price of ENJ has blasted 213.5% higher to a daily high at $3.74 on Nov. 19 as its 24-hour trading volume spiked 92% to $1.57 billion.

ENJ/USDT 4-hour chart. Source: TradingView

The rising strength for ENJ in November comes as the Enjin ecosystem aims to secure a spot as a Polkadot parachain via the crowdloan auction for its cross-chain metaverse project Efinity.

Elrond announces a $1.29 billion liquidity incentive program

Elrond is a blockchain protocol aimed at becoming the technology ecosystem for the “new internet” and it uses sharding technology to enable its network to process 15,000 transactions per second (TPS) with an average transaction cost of $0.001.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for EGLD on Nov. 12, prior to the recent price rise.

VORTECS™ Score (green) vs. EGLD price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for EGLD began to pick up on Nov. 12 and reached a high of 76, around 108 hours before the price of EGLD began to increase by 30.27% over the next three days.

The building momentum for EGLD comes as the protocols Maiar decentralized exchange (DEX) officially launched alongside a $1.29 billion liquidity incentive program designed to help attract users and liquidity to its DeFi ecosystem.

The overall cryptocurrency market cap now stands at $2.59 trillion and Bitcoin’s dominance rate is 42.2%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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3 reasons why Keep3rV1 (KP3R) price hit a new all-time high this month

A major exchange listing, steady ecosystem growth and the golden touch of a particular protocol developer back the massive 4-digit rally seen in KP3R price.

Keep3rV1 (KP3R) was one of the few altcoins that emerged unscathed from this week’s bearish turn in the crypto market.

While many digital assets plunged into the red following the lead of Bitcoin (BTC), which recoiled after recording a new all-time high last week, KP3R added 31.60% against the dollar and 44.17% against BTC between Nov. 12 and Nov. 19.

Let’s investigate what drove the splendid performance and what factors made the altcoin stand out in the face of the from the bleak dynamics of the wider market?

Founder’s magic

Much of the momentum underpinning KP3R’s explosive price movement throughout the asset’s history can be attributed to Andre Kronje, the founder of Keep3r Network. Kronje is an eminent figure in the decentralized finance (DeFi) space and also the founder of yield farming aggregator yEarn.finance (YFI), one of the top DeFi protocols in the crypto sector.

First announced in Oct. 2020, Keep3r Network is a job registry designed to match organizations and other job providers with technical professionals, or Keepers, who can perform routine tasks such as collecting yield farming harvests.

The Keep3r ecosystem eventually expanded to include Keep3r Eden, a system of rules that enables transparent ordering of transactions, a Fixed Forex market aimed at providing an alternative to USD-denominated stablecoins and an options liquidity mining platform.

Historically, there’s always been a lot of investor excitement around KP3R because the token has seen many spikes of rapid appreciation since its initial listing on Uniswap. The belief that Kronje’s touch could turn any project into an ultra-successful enterprise could be fueling the positive sentiment around the asset.

November’s bull run

This fall, having spent much of September and October trading at around $300 per token, KP3R saw its price shoot up sharply on Nov. 8, around the time when the total value locked in Keep3r Network’s Fixed Forex exceeded $1 billion.

As the token’s price began to soar, the patterns of trading volume and social sentiment around KP3R arranged in a way that looked increasingly similar to the token’s previous moments of explosive price action. This was attested by the asset’s very strong VORTECS™ Score – an algorithmic indicator comparing token’s historic dynamics of trading and social activity to those currently observed. Exclusively available to the subscribers of Cointelegraph Markets Pro, the VORTECS™ Score assesses whether the current conditions are bearish, neutral or bullish given the historical record of the coin’s price action.

On Nov. 11 and 12, KP3R was trading at just above $1,000, having almost tripled its price over the previous week. The coin’s VORTECS™ Score was in the high eighties, indicating the algorithm’s significant confidence that the KP3R’s outlook for the next 12-72 hours remained bullish and further upside could be expected.

VORTECS™ Score (green) vs. KP3R price, Nov. 11 – 18. Source: Cointelegraph Markets Pro

Crypto exchange listings tend to boost token prices

On Nov. 12, an announcement of a new Binance trading pair, KP3R/USDT, dropped on Twitter. Markets Pro subscribers received a near-instant alert of the development thanks to the platform’s NewsQuakes™ functionality (red circle in the chart).

KP3R’s price did not spike immediately, but after several hours the asset pulled off an immense rally, shooting up from $976 to the high of $1,923 in just 17 hours – nearly a 100% increase.

Granted, a Binance listing is big news for any digital asset, but in the case of KP3R, the announcement had landed on an extremely fertile ground. The arrangement of trading activity and social sentiment metrics were already tremendously favorable, and a spark provided by Binance’s tweet had triggered an extremely powerful price spike. Cointelegraph Markets Pro subscribers were alerted to both bullish conditions shaping up around KP3R and the news itself.

Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial advisor before making financial decisions.

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