Ethereum Traders Expect New Rally Over $4K
Ethereum’s traders expect a new rally above $4,000 in the near future, despite the altcoin lagging behind BTC.
The growth rate of the Ethereum (ETH) rate is clearly lagging behind Bitcoin (BTC). In October, the gap between BTC and ETH was 13%. But the experienced traders remain absolutely calm and confident that Ether will soon surpass the $4,000 mark.
It seems that professional traders are not worried about the recent stagnation in prices. To make sure of this, you should first look at the indicator that measures the price gap between the prices of futures contracts and the prices in the regular spot market (base rate).
On average, three-month futures are traded at an annual premium of 5% to 15%, which is in line with the stablecoin loan rate. By delaying settlement, sellers are asking for a higher price, and this causes a price difference.
As shown above, Ether’s inability to overcome the $3,600 resistance did not change the sentiment of professional traders, as the base rate remains at 13%. However, there is no excessive optimism at the moment either.
To understand whether retail traders have panicked and sold off their assets, it is necessary to analyze the level of funding in the futures markets.
In neutral markets, the funding rate ranges from 0% to 0.03% in the positive direction. This commission is equivalent to 0.6% per week and indicates that long positions pay it off.
Since September 7, there has been no real indication of strong demand for leverage from either the bulls or the bears. This indicates a lack of appetite for retail traders to close long positions using leverage. But it also demonstrates little panic selling or lack of excessive fear.
The derivatives markets show that Ethereum investors are not worried about its lag behind Bitcoin. In addition, after growing 274% YTD, there is no overly long leverage.
It looks like, albeit with cautious optimism, ETH traders are gearing up for a new rally above all-time highs.