Ethereum is close to correction

Over the past 30 days, Bitcoin and Ethereum are up 40%, hitting all-time highs. However, now holding long positions is more costly due to the increase in the funding rate, and the shares of the mining companies have already moved to a correction.

The growing interest in cryptocurrencies brings new entrants to the market

About 2/3 of perpetual futures traders buy cryptocurrencies using leverage. Because of this, the funding rate is growing, which is recalculated every 8 hours. Now its size is almost 0.2%, which leads to a 3.9% commission on a weekly long position.

The graph shows that every significant increase in the funding rate is followed by a drop in the value of Ethereum.

The second sign of an impending correction is a decrease in trading volumes in the spot market. Coinbase cryptocurrency exchange data is used as an example.

The price growth continues by inertia and is not supported by such large volumes as before, and the share of sellers has grown from 18% to 35% over the past two weeks. Another indirect sign of an impending correction is the fall in the value of miners' shares. Yesterday, Riot Blockchain securities collapsed by 20%, despite the announcement a week earlier about the additional connection of 2 thousand ASICs of the S19 Pro Antminers model.

However, we are talking about an approaching technical correction, rather than a major fall. Institutional investors continue to buy both cryptocurrencies and shares of miners and crypto funds. On February 17, Grayscale alone added 20,000 ETH to its Ethereum Fund, which now stands at $ 6 billion.

Johannes Röll

Johannes Röll was born 1978 in Brilon,Germany. Graduated RWTH Aachen University. Over the past ten years he worked as Head of the plastic card team, where he was mainly responsible for the development of the distribution, Head of sales Department and Financial Analyst,where he got experience in planning and support sales figures for branches. For the present he works as freelancer

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