Ethereum Futures Market Stats Indicate Increased Short Inclination

December 26th, 2019

Ethereum [ETH] investors were highly alarmed of a possible dumping yesterday. About $25 million in ETH were moved to exchanges like Kraken, Binance and Huobi. Blockchain analytics start-up, Viewbase tweeted,

204,530 $ETH has been sent to exchanges, with 89,058 ETH going to #Kraken, 25,908 ETH going to #Binance and 99,987 ETH to #Huobi respectively.

The Blockchain explorer, etherscan.io confirms the transactions.Nevertheless, the price has been relatively stable which suggests that there could be other reasons for the transfer of funds.

ethusd
ETH/USD 1-Day Chart on Bitstamp (TradingView)

The price of ETH at 4: 43 hours UTC on 26th December is $125.01.

Futures and Perpetual Swaps market update

According to Skew data, Ethereum futures are largely traded on China based crypto exchanges like Huobi and Okex. (The grey and green parts indicate Huobi and Okex, respectively).

Ethereum Futures Market Stats Indicate Increased Short Inclination
Ethereum Futures Agg. Volume (Source)

Moreover, BitMEX data reveals that while the Open Interest (essentially the volume of contracts active in the market) has dropped, the sell volume has been considerably more than the buy volume since yesterday.

ethusd butmex
ETHUSD Bitcoin Buy/Sell Volume (Source)

Nevertheless, the funding rate on BitMEX which was negative on 23rd December is currently positive. The funding rate on Okex is positive as well.

The ETH basis (difference between futures price and spot price) on OKex is close to zero, it dropped from positive integer values above $1 sometime around in November. A negative basis would indicate a market sell-off. Around the same time in November, the Open interest on the exchange also witnessed a huge drop.

The overall long/short ratio on the Okex as also dipped in the past few days. Furthermore, the top 100 traders on the exchange are highly inclined towards shorts positions (57% shorts vs. 42% longs).

Ethereum Futures Market Stats Indicate Increased Short Inclination
ETHUSD Long/Short Ratio of Derivatives on Okex

Hence, as the fear grows in the market, the short selling of Ethereum could further continue.

The volume profile of Ethereum perpetual contracts on BitMEX suggest diminishing volume support below current levels. The $127-$130 region in where the demand might likely increase again. Below these levels, the fear is the market might continue to spread.

ethusd volume profile
ETH/USD 4-Hour Chart on BitMEX (TradingView)