Key takeaways:
Retail traders maintain 94% long positions on Ether, which often signals a contrarian viewpoint.
ETH funding on Binance remains robust, with leverage at a moderate level and not euphoria-driven.
BitMine has continued its accumulation, adding over 300,000 ETH to its reserves this week.
Ether (ETH) is trading below the key $4,000 level, struggling to gain bullish momentum after last Friday’s flash crash. The altcoin is consolidating between its 50, 100, and 200-day exponential moving averages (EMAs), a technical area that indicates the ongoing battle between short-term and long-term market trends.
Retail ETH longs dominate the futures market, but carry a contrarian outlook
Amid the mixed technical indicators, retail traders seem to be betting heavily on further increases. Data from Hyblock Capital shows Ether’s True Retail Accounts (TRAs) long percentage has reached the 90th percentile, among the highest levels in major crypto assets. Hyblock noted,
“True Retail Accounts Long% is getting high among several coins, noting percentile readings of 94% for Bitcoin, 90% for Ether, and 86% for Solana.”
Interestingly, the firm mentioned that retail long positioning is inversely correlated with price, at -0.86 for ETH, suggesting that as retail longs peak, the likelihood of a reversal increases.
The 90th percentile for ETH longs indicates that retail sentiment is heavily tilted toward optimism (expecting price increases). Historically, extreme retail positioning, especially at the 90th percentile, can serve as a contrarian signal.
This could imply overcrowding in long positions, and a reversal may occur if retail traders begin taking profits or face liquidations.
Regarding the derivatives market, crypto analyst Pelin Ay provided a more detailed perspective on the market structure, noting that funding rates remain positive yet contained, indicating a long-dominated market without euphoria.
Ay elaborated that current funding levels between 0.01%–0.03% suggest a healthy mid-phase uptrend, significantly below the overheated bull-phase levels of 0.1%–0.2% experienced in 2021. The analyst added that moderate leverage and rising spot demand might pave the way for a rally toward $4,500–$5,000, while any quick increase in funding above 0.05% could signify overcrowded longs, potentially causing short-term pullbacks.
Related: 95% of corporate ETH buys happened in Q3 — start of Ether supercycle?
Institutional treasuries buy the Ether dip
Large ETH holders are seizing opportunities from the recent price pullback. Data indicates that BitMine Immersion Technologies, led by Tom Lee, purchased 104,336 ETH valued at approximately $417 million on Thursday.
This added to BitMine’s previous acquisition of over 202,000 ETH on Sunday, bringing the current market value of its ETH reserve to $9.3 billion. Despite the recent volatility, Lee has reaffirmed his year-end target of $10,000 per ETH, bolstered by growing institutional and spot market demand.
Related: Ethereum confirms bearish signal that last time led to ETH dropping 60%
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
