Despite the latest price change of the leading altcoin Ethereum (ETH), there has been an increase in the number of short selling. Here are the details….
The number of short positions increased in the largest altcoin project
Leading altcoin Ethereum is heavily shorted (short position) by the majority of market participants following a rapid change in the cryptocurrency’s funding rates. In the last 24 hours, it has become even more expensive to short the second largest cryptocurrency in the market. According to some, Ethereum’s price performance over the past two days and the combination of orders in the market may cause some confusion, as the latest breakout should have resulted in an increase in the number of longs in the market.
However, most of the market participants decided to short the second largest cryptocurrency in the market rather than open more long positions to support the rally. However, according to some, we may encounter a short squeeze that will serve as fuel for the volatility and potential continuation of the rally. For forced liquidations to occur in the market, it would need to gain substantial input, preferably from whales and institutional investors.
What do the metrics show for ETH?
Ethereum has seen a massive increase in positive trading volume, which is the underlying reason for an unexpected breakthrough. However, metrics like the Relative Strength Index show that ETH is already overbought. This is why some traders are so actively short selling. Buterin’s cryptocurrency previously showed a similar dynamic in the market when it broke the same resistance level on September 11. Investor behavior then was similar to today. The activity of the bears also increased drastically and the trend reversed shortly after the breakthrough.
The latest price change in the market: What happened?
So what happened to the surprising price action that made traders go short in ETH? As we reported on cryptokoin.com, while Bitcoin usually leads the market fluctuations, Ethereum has outperformed BTC. Over the past day, Ethereum has seen a spike resulting in several short squeezes. Currently, it surpasses other tier-1 competitors such as BNB Chain and Avalanche. In fact, not only ETH, but also cryptocurrencies in the ETH ecosystem are performing quite well.
Lido and Rocket Pool, two liquid staking protocols, reached double digits during the day. Rocket Pool became one of the few tokens to surpass Ethereum. Optimism’s OP token has been a featured coin in the last 24 hours. The Ethereum layer 2 project increased by 18.4 percent on the day. According to experts, interest in Ethereum is likely spreading to the layer 2 ecosystem.
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