Data shows that professional traders are currently more optimistic about Ethereum than Bitcoin

Since the beginning of this year, the performance of ETH has exceeded that of BTC by 230%. And derivatives data show that traders believe that this altcoin still has a lot of room for growth.

Most traders have noticed that the price of Ether (ETH) is far ahead of Bitcoin (BTC). The ETH/BTC exchange rate has rebounded by more than 230% in 2021, and recently hit a new high of 0.089 BTC on December 9.

From this perspective, ETH’s $490 billion market value is currently equivalent to 54% of BTC’s $903 billion market value. This proportion was only 15% at the end of 2020, so it can be concluded that a “counterattack” is taking place. It may still be far from the imagination of Ethereum supremacists, but it is still a pretty respectable change.

Rather than analyzing the reasons for this move, or even predicting the results based on some random expectations, analysts should explore the market structure of each token individually.

For example, do the two futures market premiums face similar trends, and how does the long-short ratio of professional traders compare? These are the most relevant indicators to determine whether a trend has the power to continue.

Futures premium is biased towards Ethereum

Quarterly futures are the tool of choice for Giant Whales, but due to their settlement dates and price differences from the spot market, they can be complicated for retail traders. However, the most obvious advantage of these quarterly contracts is the absence of fluctuating funding rates.

The transaction price of these fixed-month instruments is usually slightly higher than the spot market price, indicating that the seller is asking for more funds to extend the settlement time. Therefore, in a healthy market, futures should be traded at an annualized premium of 5% to 15%. This situation is called “contango” and is not unique to the cryptocurrency market.

After comparing these two graphs, we can see that the average annualized premium for Bitcoin futures in March 2022 is 2.6%, and the average annualized premium for June 2022 is 4.4%. In contrast, Ethereum’s premiums are 2.9% and 5%, respectively. Therefore, it is obvious that the giant whale has higher requirements for the premium of ETH, which is a bullish indicator.

Bitcoin long-short ratio drops

In order to effectively measure the positions of professional traders, investors should monitor the long-short ratio of top traders on leading cryptocurrency exchanges. This indicator provides a broader view of traders’ effective net positions by collecting data from multiple markets.

It is worth noting that the data collected by exchanges of head traders is different because there are multiple ways to measure the net exposure of customers. Therefore, any comparison between different suppliers should be made on percentage changes, not absolute numbers.

The long-short ratio of leading Bitcoin traders is currently at an average ratio of 1.21, which is lower than the 1.39 on December 5. Compared with 1.59 two weeks ago, this shows that the buyer (long) has reduced its risk exposure by 24%. Once again, absolute numbers are not as important as overall changes over time.

At the same time, the Ethereum Giant Whale and others have shown positive emotional changes since December 5th, after the longs versus the shorts moved from 1.0 to 1.16. When comparing the average data on November 25, the long-short ratio of top ETH traders has dropped by 20% from 1.43.

Data shows that ETH traders are more confident

The current derivatives data is more optimistic about ETH, because the asset currently shows a higher futures base rate. In addition, since October 5th, the head trader’s long-short ratio has improved, heralding confidence in the delicate period of ETH falling 16% from its all-time high of $4,870.

In contrast, BTC investors may be less confident because its price is 31% lower than the all-time high of $69,000 on November 10. Judging from the futures premium and long-short data, ETH seems to have enough motivation to continue to achieve outstanding performance.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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