Ethereum, unlike Bitcoin, had a relatively active weekend in terms of price action, with ETH hovering around the $550-mark, at press time. In fact, Ethereum shorts equivalent to over 2500 ETH were liquidated across derivatives exchanges like OKEx and Binance. While more and more retail traders expected ETHs price to slow down over the weekend, the cryptocurrencys price trend has continued unopposed.
Though there are several factors driving the demand for ETH and subsequently its price, the OI and trade volume on derivatives exchange have both proven to be reliable metrics that might signal a change in price trend. At the time of writing, the OI in ETH was low on derivatives exchanges like Deribit, Huobi, and OKEx. After hitting a high of nearly $900M on 24 November 2020 when the price was $603, it dropped to $650M, based on charts from Skew.
Not just OI, but the trade volume dropped from $130M to $40-$45M too. However, a drop of over 70% in a single day on 27 November 2020 did not stop the price rally. ETHs price continued to rally accompanied by demand from retail traders and unique addresses across spot exchanges.
While it may be lucrative for retail traders to open shorts here, based on metrics and data from charts, it may turn out to be less than ideal. As of 30 November 2020, 94.43% of orders were longs and 5.57% of orders were shorts on BitMEX. The launch of ETH 2.0 has precipitated bullish sentiment among retail and traders sentiment for ETH is negative.< ...
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