• About Us
  • Privacy Policy
  • Contact Us
Subscribe
Lascena
Advertisement
  • Home
  • Bitcoin
  • Cryptocurrency
    • Altcoin
    • Litecoin
    • Ethereum
  • Blockchain
  • Regulation
  • Market
  • Prices 2021LIVE
  • Videos
No Result
View All Result
  • Home
  • Bitcoin
  • Cryptocurrency
    • Altcoin
    • Litecoin
    • Ethereum
  • Blockchain
  • Regulation
  • Market
  • Prices 2021LIVE
  • Videos
No Result
View All Result
Lascena
No Result
View All Result

Ether Looks Overleveraged as Cryptocurrency Hits New High Over $1,900

February 18, 2021
in Market
Reading Time: 8min read
Ether Looks Overleveraged as Cryptocurrency Hits New High Over $1,900


Ether soared to new record highs Thursday, but an overheated derivatives market may suggest higher volatility is on the way for the short term. 

The second-largest cryptocurrency by market value set the new lifetime high of $1,928 soon before press time, having first breached the previous peak of $1,821.49 reached on Feb. 13 early today, according to CoinDesk 20 data. 

In the derivatives market, the average level of the “funding rate” across major exchanges offering ether perpetuals (futures with no expiry) has risen sharply from 0.069% – just short of the early January record high of 0.21%, according to data source Glassnode. 

“It shows the derivatives market is overleveraged,” Patrick Heusser, head of trading at Swiss-based Crypto Finance AG, told CoinDesk. “With this current structure, I do not feel comfortable in running a lot of long exposure.” 

The funding rate is calculated every eight hours and represents the cost of holding long positions. When perpetuals trade at a premium to spot price, the funding rate is positive (longs pay shorts). Hence, a very high funding rate is considered a sign of leverage being excessively skewed to the bullish side (overbought conditions) and often injects volatility into the market. 

Ether: Average funding rate
Source: Skew

In such situations, holding longs at high costs is attractive only if the bullish momentum remains strong. A pullback or consolidation can trigger an unwinding of longs, leading to a more profound price drop and a pick-up in price volatility. As of press time, ether is showing no signs of price congestion.

However, the case for a continued steep rally looks weak, with spot market volumes falling on major exchanges such as Coinbase.

Ether daily chart
Source: TradingView

With the 10-day moving average of daily volume trending south, there’s a question mark on the sustainability of recent gains. A low-volume price rise is often short-lived. 

That said, a pullback, if any, could be shallow and brief, as on-chain fundamentals are biased bullish. 

The number of coins held on exchanges has declined by 10% to 20.77 million in the past three months, according to data source CryptoQuant. It shows investors are either taking direct custody of coins or staking them into decentralized finance protocols, creating a sell-side liquidity shortage. 

Ether exchange reserves (number of balances held in exchange addresses)
Source: CryptoQuant

“In the long-run, [the] ETH rally would keep going as long as ETH holdings in all exchanges are decreasing,” Ki-Young Ju, CEO of CryptoQuant, told CoinDesk. 

Other metrics also paint a bullish picture. For instance, the 90-day average of active addresses on Ethereum’s network has increased to a new lifetime high of around 450,000, surpassing the 2017 peak, according to Glassnode.  

Ethereum: 90-day average of active addresses
Source: Glassnode

“When there’s greater usage, there’s more demand for the cryptocurrency, and that drives the price up,” Philip Gradwell, chief economist at the blockchain intelligence firm Chainalysis, told CoinDesk.

Also read: Ethereum’s Favorite Lossless Lottery Will Airdrop Its POOL Token Today 





Source link

Facebook0
Twitter0
Linkedin0
Print0
E-mail0
Yahoo Mail0
GMail0
SMS0
Messenger0
Tags: CryptocurrencyEtherHighHitsOverleveraged
Next Post
How Crypto Transforms Prediction Markets

How Crypto Transforms Prediction Markets

GOLD/BTC ratio falls to an all-time low

GOLD/BTC ratio falls to an all-time low

Don't Miss

Bitcoin Support at $47K “Very Strong,” Glassnode CTO Asserts After Price Falls
Bitcoin

Bitcoin Support at $47K “Very Strong,” Glassnode CTO Asserts After Price Falls

by Lascena Cryptocurrency News Education
March 5, 2021
0

Bitcoin has an extreme potential to hold $47,000 as its support level, according to Rafael Schultze-Kraft, the co-founder/CTO of...

Read more
Powell Comments Leaves Bitcoin Market Sour; Bearish Assault Ahead?

Powell Comments Leaves Bitcoin Market Sour; Bearish Assault Ahead?

March 5, 2021
BREAKING! TRUMP Pumps BITCOIN Over $10,000 as Protests Rage Across America – June 2020 Crypto News

BREAKING! TRUMP Pumps BITCOIN Over $10,000 as Protests Rage Across America – June 2020 Crypto News

March 5, 2021
Ripple XRP “Watch in the Next 24 hrs, People Need To Know This!” Robert Kiyosaki

Ripple XRP “Watch in the Next 24 hrs, People Need To Know This!” Robert Kiyosaki

March 5, 2021
BREAKING: The US JUST Made LARGEST Cryptocurrency Announcement in History!! | Cryptocurrency News

BREAKING: The US JUST Made LARGEST Cryptocurrency Announcement in History!! | Cryptocurrency News

March 5, 2021

Lascena Cryptocurrency News Education

We have all the latest updated and legitimate information related to Blockchain, Cryptocurrency, latest market rates & trends, prices, new regulations along with every other thing that somehow related to crypto or digital currency market. Our main idea is to provide the kind of news that is original and at the same time, it can prove to be beneficial for our audience.

© 2020 lascena.ca

  • About Us
  • Privacy Policy
  • Contact Us
No Result
View All Result
  • Home
  • Bitcoin
  • Cryptocurrency
    • Altcoin
    • Litecoin
    • Ethereum
  • Blockchain
  • Regulation
  • Market
  • Prices 2021
  • Videos

© 2020 lascena.ca

  • bitcoinBitcoin(BTC)$47,295.00-4.30%
  • ethereumEthereum(ETH)$1,477.19-5.48%
  • tetherTether(USDT)$1.010.28%
  • cardanoCardano(ADA)$1.13-4.52%
  • Binance CoinBinance Coin(BNB)$222.01-7.36%
  • PolkadotPolkadot(DOT)$32.93-9.32%
  • rippleXRP(XRP)$0.4568181.02%
  • litecoinLitecoin(LTC)$173.67-6.79%
  • chainlinkChainlink(LINK)$26.54-8.86%
  • bitcoin-cashBitcoin Cash(BCH)$483.18-6.58%