Ethereum price weakens near key support, but traders are afraid to open short positions

Ether (ETH) has been stuck betwixt $1,170 to $1,350 from Nov. 10 to Nov. 15, which represents a comparatively choky 15% range. During this time, investors are continuing to digest the antagonistic interaction of the Nov. 11 Chapter 11 bankruptcy filing of FTX exchange. 

Meanwhile, Ether’s full marketplace measurement was 57% higher than the erstwhile week, astatine $4.04 cardinal per day. This information is adjacent much applicable considering the illness of Alameda Research, the arbitrage and market-making steadfast controlled by FTX's laminitis Sam Bankman-Fried.

On a monthly basis, Ether's existent $1,250 level presents a humble 4.4% decline, truthful traders tin hardly blasted FTX and Alameda Research for the 74% autumn from the $4,811 all-time precocious reached successful November 2021.

While contagion risks person caused investors to drain centralized exchanges wallets, the question led to an uptick successful decentralized exchanges (DEX) activity. Uniswap, 1inch Network, and SushiSwap saw a 22% summation successful the fig of progressive addresses since Nov. 8.

Let's instrumentality a look astatine derivatives metrics to amended recognize however nonrecreational traders are positioned successful the existent marketplace conditions.

Margin markets amusement nary signs of distress

Margin trading allows investors to get cryptocurrency to leverage their trading position, perchance expanding their returns. For example, 1 tin bargain Ether by borrowing Tether (USDT), frankincense expanding their crypto exposure. On the different hand, borrowing Ether tin lone beryllium utilized to abbreviated it oregon stake connected a terms decrease.

Unlike futures contracts, the equilibrium betwixt margin longs and shorts isn’t needfully matched. When the borderline lending ratio is high, it indicates that the marketplace is bullish — the opposite, a debased lending ratio, signals that the marketplace is bearish.

OKX USDT/ETH borderline lending ratio. Source: OKX

The illustration supra shows investors' morale topped connected Nov. 13 arsenic the ratio reached 5.7, the highest successful 2 months. However, from that constituent onward, OKX traders presented little request for bets connected the terms uptrend arsenic the indicator declined to the existent 4.0 level.

Still, the existent lending ratio leans bullish successful implicit terms, favoring stablecoin borrowing by a wide margin. It is worthy highlighting that the wide sentiment improved since Nov. 8 arsenic traders accrued request for borderline longs utilizing stablecoins.

Related: Genesis Global halts withdrawals citing 'unprecedented marketplace turmoil'

Long-to-short information shows reduced request for leverage longs

The apical traders’ long-to-short nett ratio excludes externalities that mightiness person solely impacted the borderline markets. By aggregating the positions connected the spot, perpetual and quarterly futures contracts, analysts tin amended recognize whether nonrecreational traders are leaning bullish oregon bearish.

There are occasional methodological discrepancies betwixt antithetic exchanges, truthful viewers should show changes alternatively of implicit figures.

Exchanges' apical traders Ether long-to-short ratio. Source: Coinglass

The long-to-short ratio astatine Huobi stood astatine 0.98 betwixt Nov. 8 and Nov. 15, indicating a balanced concern betwixt leverage buyers and sellers. On the different hand, Binance traders initially faced a heavy contraction successful the request for longs, but the question was utterly subdued arsenic buying enactment dominated from Nov. 11 onward.

At the OKX exchange, the metric plunged from 1.30 connected Nov. 8 to the contiguous 0.81, favoring shorts. Therefore, according to the long-to-short indicator, the apical traders importantly reduced their longs until Nov. 10, but past proceeded to summation agelong positions.

From a derivatives investigation constituent of view, neither futures nor borderline markets show excess request for shorts. Had the panic-based sentiment prevailed, 1 would expect worsening conditions connected the Ether lending and long-to-short indicators.

Consequently, bulls are successful power arsenic traders are not comfy taking bearish positions with ETH beneath $1,300.

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.