Oh where, oh where have Ethereum bulls gone? Sub-$4K ETH fails to entice traders

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Cryptocurrency price corrected sharply today, including Ether (ETH), but this is a short-term move which is not reflective of the more macro-level events which still paint a bullish picture for assets like Ether and Bitcoin.

In the last 30 days, Ether price gained 96%, moving from $2,138 to $4,200 on May 11. Normally the assumption would be that every trader is consumed with euphoria and this would be seen in the funding rate reaching record highs on Ether futures contracts but at the moment this is not the case.

The funding rate appears to have flatlined on April 18 and at the moment it seems that there’s nothing that can be done to re-ignite buyers’ leverage.

Ether token-margined perpetual futures 8-hour funding rate. Source: Bybt

Take notice of how the cost for longs (buyers) to carry open positions on Feb. 20 reached 0.20% per 8-hour, equivalent to 4.3% per week. A 74% price hike in 30 days fueled that situation as Ether tried to break the $2,000 resistance.

More recently, a similar situation took place on April 3 after Ether rallied 43% to a $2,150 all-time high. Movements like these typically mark retail traders’ excessive use of leverage. Meanwhile, whales and arbitrage desks open longs using the fixed-month future contracts to avoid the funding rate oscillations.

The 19% negative price swing on April 17 caused $1 billion long futures contracts liquidations. That event crushed bulls’ morale also impacted their confidence in building leveraged-long positions.

Top traders also lack confidence

Typically retail traders are more…

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