Ethereum [ETH] failed to hold the $1.8k level and dropped to a low of $1,773 before making slight gains. As of this writing, Ethereum was trading around $1,780 after dropping 1.26% on the daily chart.
Amid this market volatility, traders on both sides are staging a fierce battle seeking to retake the market.
Ethereum: Bears and bulls fight for market control
As Ethereum failed to maintain its upside momentum, with $1.8k turning into stubborn resistance, traders have taken notice. As a result, high-net-worth investors have deployed significant capital to open both short and long positions.
According to Lookonchain, a trader opened a 20x short on 30,000 ETH worth $53.49 million. With ETH showing some strength, the trader is already up $846.4k on this position.
Historically, this trader has a strong winning record, having previously made over $444k on trading other coins. This short position showcased the whale’s bearish expectations.
The second trader opened a 10x long on 30,000 ETH worth $53.49 million. So far, the whale is down $823.1k as ETH continues to drop.
This trader has a strong winning record, too, and previously closed eight trades, winning six and totaling $3.1 million in profit. The whale’s decision to open longs suggested they were bullish and expected ETH to rebound.
Derivatives traders remain bearish
Although the above two traders showed interest, overall market participants remained bearish and were aggressively selling at press time.
Notably, the Derivatives Taker Buy Sell Ratio fell back below 1. Currently, it is around 0.946, levels last witnessed two weeks ago.
When this metric sits below 1, it suggests that more sell-side trades were executed in the derivatives market. A look at the Futures Netflow metric confirms this view.
Over the past 12 hours, for instance, $5.94 billion flowed out of the Futures position. The altcoin’s Futures Netflow dropped to -$88 million.
The outflows are even more extreme in the 8- and 4-hour time frames, periods during which Netflow fell toward -$200 million.
What’s next for ETH?
Although sellers dominate derivatives, Ethereum’s overall directional momentum shows some stability. Thus, capital flowing into both longs and shorts is boosting momentum.
When we look at the ADX with the SMA indicator, the positive index is significantly above the negative index. At the same time, SMA and ADX are also below the +DI, suggesting that upside momentum is currently stronger.
When this indicator is set in this manner, it often signals a likelihood of upside recovery. If the battle between bulls and bears persists, capital flows could help ETH reclaim $1.8k, setting it up for another upside move.
However, if the downtrend continues and liquidates bulls, we could see another slip below $1.7k.
Final Summary
- The battle between bulls and bears in Ethereum heats up: a trader opened a $53.49 million short position, while another opened a $53.49 million long position.
- ETH failed to hold $1.8k and dropped to a low of $1,773, but directional momentum remains stable.