Futures open positions for Ethereum reached a record $ 8.5 billion. Professional investors believe that ETH will reach a new high of $ 3500 soon.
On April 29, Ether (ETH) hit an all-time high of $ 2800. This growth also increased open futures for crypto, with a new record level of $ 8.5 billion. This stands out as a 52% growth, indicating the increase in trade activity that contributed to the price increase.
Ethereum derivatives are actually not very popular among analysts and traders. The CME Group, a futures and trading option, has only $ 355 million of short positions, despite its launch a few months ago. This is quite a small number compared to Bitcoin’s short positions at $ 2.4 billion.
Ethereum may not have experienced its real rise yet
Analysts believe Ethereum is not in a bullish position yet. There are factors used to assess whether a market is in a bullish state. The main factor used is a futures premium, which measures the price difference between future contracts and current market prices.
If an asset is in an uptrend, the futures premium should be 10% to 20%. This is known as the lending rate. ETH’s April term premium remained at 45%. Since this is too high, it can be a sign of too much optimism.
Professional traders usually apply for monthly futures contracts, while retail investors turn to permanent contracts or reverse swaps. In permanent contracts, a funding rate is received from retail investors every 8 hours. The funding rate increases each time buyers with long leverage and their accounts are charged regularly.
When retail business activity is incredibly high, the funding rate can rise to a maximum of 5.5% each week. In mid-April, the 8-hour funding rate for permanent contracts reached around 3.8% per week. This higher fee led to more optimism for monthly futures. However, the funding rate has been fixed and is now back to the standard rate.
The increase in the funding rate in mid-April shows that retail investors are less upward in Ethereum than professional investors. The 3-month futures base currently stands at 25% annualized. This is comparatively higher compared to other similar platforms. This means that buyers who want to speculate on the long term are now more willing to pay a premium to protect their open positions.