Ether (ETH) price has been unable to close above $1,400 for the past 29 days and has been trading in a relatively tight range of $150. At the moment, $1,250 support and $1,250 resistance 1,400 seems hard to break, but two months ago, Ether was trading at $2,000. Ether’s current price range simply reflects how volatile cryptocurrencies can be.
On the one hand, investors are calm as Ether is trading 50% above the intraday low of $880 on June 18. Yet the price is still down 65% year-to-date despite the most exciting update in the network’s seven-year history.
More importantly, Ethereum’s biggest rival, BNB Chain, suffered a cross-chain security exploit on Oct. 6. The $568 million exploit caused BNB Chain to temporarily suspend all transactions on the network, which has $5.4 billion in smart contract deposits.
Ether underperformed competing smart contracts such as BNB, Cardano (ADA), and Solana (SOL) by 14% since September, despite its TVL in ETH terms rising 9% over the period. This suggests that Ethereum network issues, such as $3 average transaction fees, influenced the price of ETH.
Traders should look at data from the Ether derivatives markets to understand how whales and market makers are positioned.
Options traders remain moderately risk averse
The 25% delta bias is a telltale sign when professional traders overcharge for upside or downside protection. For example, if traders were expecting an Ether price drop, the Options Markets Bias Indicator would move above 12%. On the other hand, widespread enthusiasm reflects a negative bias of 12%.
In simple terms, the higher the index, the less inclined traders are to offer downside risk protection. The indicator has been signaling fear since September 19, when it last held a value below 10%. That day marked the temporary bottom of a 28% weekly correction as support at $1,250 strengthened after such a test.
Long to short data shows traders adding longs
The net long to short ratio of the top traders excludes externalities that might have affected only the options markets. By adding cash positions, perpetual and quarterly futures contracts, you can better understand whether professional traders are leaning bullish or bearish.
There are occasional methodological discrepancies between different exchanges, so viewers should monitor changes rather than absolute numbers.
Binance showed a modest increase in its long-to-short ratio between Oct. 13 and Oct. 17, as the indicator went from 1.04 to 1.07 in those four days. Therefore, those traders slightly increased their bullish bets.
Huobi data shows a stable pattern as the long-to-short indicator remained close to 0.98 all the time. Lastly, on the OKX exchange, the metric crashed to 0.72 on Oct 13, heavily favoring the shorts only to rally back to the current 1.00.
On average, based on the long-to-short indicator, top traders on those three exchanges have been building long positions since the $1,200 support test on Oct. 13.
Bias and leverage are critical to hold $1,250 support
There was no significant improvement in professional traders’ derivatives positions despite Ether gaining 12% from the Oct. 13 crash to $1,185. Furthermore, options traders fear that a move below $1,250 remains feasible considering the bias indicator remains above the 10% threshold.
If these whales and market makers had strong convictions of a strong price correction, that would have been reflected in the long to short ratio of the major traders.
Investors should closely monitor both metrics. The 25% delta bias should remain at 18%, and the long to short ratio above 0.80 to maintain strength support at $1,250. These indicators are a telltale sign of whether the bearish sentiment of major traders is gaining momentum.
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