Key takeaways:
Retail traders maintain 94% long positions on Ether, often indicating a contrarian signal.
ETH funding on Binance remains robust, with moderate leverage, avoiding euphoric levels.
BitMine has added over 300,000 ETH to its reserves this week.
Ether (ETH) continues to trade below the significant $4,000 mark, struggling to gain bullish momentum following last Friday’s flash crash. The altcoin is consolidating between its 50, 100, and 200-day exponential moving averages (EMAs), showcasing a tug-of-war between short-term and long-term market trends.
Retail ETH longs lead the futures market, presenting a contrarian perspective
Despite a mixed technical backdrop, retail traders seem to be betting heavily on price hikes. Data from trading platform Hyblock Capital shows Ether’s True Retail Accounts (TRAs) long percentage reaching the 90th percentile, one of the highest among key crypto assets. Hyblock noted,
“True Retail Accounts Long% is peaking for several coins, with percentile readings of 94% for Bitcoin, 90% for Ether, and 86% for Solana.”
The firm surprisingly indicated that retail long positioning shows an inverse correlation with price, at -0.86 for ETH, suggesting that as retail longs hit extreme highs, the potential for a reversal increases.
The 90th percentile for ETH longs indicates a significant optimism among retail traders (i.e., expectation of rising prices). Historically, such extreme retail positioning, particularly reaching high percentiles (e.g., 90th), can serve as a contrarian signal.
This may reveal overcrowded long positions, which could lead to a pullback if retail traders begin to take profits or face liquidation.
Analyzing the derivatives market, crypto analyst Pelin Ay provided a deeper understanding of the market structure, noting positive yet restrained funding rates, signaling a long-dominated market but without excessive enthusiasm.
Ay explained that current funding rates of 0.01%–0.03% suggest a healthy mid-phase uptrend, significantly below the overheated bull-phase metrics of 0.1%–0.2% observed in 2021. The analyst asserted that moderate leverage and rising spot demand could pave the way for a fresh rally towards $4,500–$5,000, while a sudden spike in funding over 0.05% might indicate overcrowded longs and instigate short-term pullbacks.
Related: 95% of corporate ETH buys occurred in Q3 — beginning of an Ether supercycle?
Institutional treasuries capitalize on the Ether dip
Large ETH holders are taking advantage of the recent declines. Data revealed that BitMine Immersion Technologies, led by Tom Lee, accumulated 104,336 ETH valued at around $417 million on Thursday.
This acquisition follows BitMine’s earlier purchase of over 202,000 ETH on Sunday, with the current market valuation of its ETH reserves reaching $9.3 billion. Despite recent price swings, Lee has maintained his year-end target of $10,000 per ETH, backed by rising institutional and spot market demand.
Related: Ethereum affirms bearish signal that previously led to a 60% decline in ETH
This article does not contain investment advice or recommendations. Each investment and trading decision carries risk, and readers should conduct their own research when making choices.
