Ethereum Shorts Catapult Beyond the Stratosphere

Some ◊400,000 eth are currently betting that ethereum’s price will go down, some ◊50,000 more than the ◊350,000 betting it will go up.

Starting on December the 5th, ethereum shorts have catapulted beyond the stratosphere and to what may well be the bear moon.

Some 200,000 eth was added to shorts in three days between December the 5th and December the 7th when eth’s price was between $110 and $90.

Meaning most of these shorts were opened after price fell somewhat considerably in November from about $200 to circa $100.

Longs briefly fell by ◊70,000 during this period, but they remain generally unchanged after they fell from their all time high of ◊500,000 in September to now ◊350,000.

In bitcoin longs are sort of yoyo-ing in a somewhat straight line while shorts have doubled since November from 20,000 btc to 40,000 bitcoins.

On or around December the 5th, there was a rise in shorts by about ₿10,000, with some closing to now ₿37,000, which is considerably more than the current longs of ₿28,000.

Reading this data is difficult because it’s just guessing, but the obvious conclusion is that most traders are bearish.

What does that mean, is the billion dollar question. Well it could mean that perhaps they know something we don’t, or that they just think the price has more to go down, or maybe they’re hedging in some form.

It could also mean that perhaps we’ve reached peak bear, with no one left any longer to turn bearish, but then people said that at $400, $300…

Obviously we’ve learned the lesson now so we won’t mention that word bottom. Send it to zero some might be thinking, one eth is still one eth out of 100 million.

More technically, what this means is that if price rises then there would be fuel in shorts which have to buy eth to pay it back after they borrowed it at a price of $90 to $110.

Yet if price falls there would be fuel in longs, so, even Cramer doesn’t know (it’s a meme).

ICOs have sold one of the highest amount within a 30 days period, about 370,000 eth. Their total holdings are now going down, but it’s still a combined ◊3 million.

On the other hand, about 1.5 million eth is now locked in dai and other likewise dapps as decentralized finance rises.

Very interestingly, transaction levels have found a floor at about 500,000 a day. One could think this is due to the gas limit, but fees are currently below a penny.

Meaning the ethereum network has daily utility for what may be half a million people. Some of that might be dapps, which are continuing to rise in usage to now 15,000-20,000 daily active users. Up from circa 10,000 last time we checked earlier this year.

Miners have left if the hashrate’s halvening says anything. Currently they’re all at or close to a loss. Meaning they won’t be selling eth to buy warehouses and some of them might not be selling even to cover electricity. On the other hand, some miners are shorting their own product because stupid is what stupid do.

Google searches in US have also seemingly found a floor of sorts, rising from a low of six just before the mid November plunge to now a flat 9 for the past month or so. The same for global searches, but from a low of 8 to now 10 out of 100.

Whether this is a leading or a lagging indicator isn’t very clear, but if we are to guess and probably be wrong, then you’d think someone first googles eth and then buys.

Obviously there are plenty who know of eth and have eth so they don’t need to google it, they just buy or indeed sell what eth they have.

So in that old tradition of technical analysis and all the rest, we’ve kind of said all potential eventualities, so we can’t be wrong. As such, we’ll defo brag if this falls or rises or sideways (joke, it’s a joke).

Ah, one final factor. We’ve stopped reading ethtrader daily. Just couldn’t handle it anymore, too depressing.

At the risk of revealing our tricks, they used to be a useful information pipeline resource sort of thing after wading through all the noise, if for nothing else than to get “feels,” but they became a bit too depressed and it became a bit too much.

We look forward to returning if and when that changes, but we might now be at the stage where no one cares about the price anymore, it might be just a question of at what level is the hodl floor. At zero you can joke, but no care.

A final word which you can completely ignore, but its editor’s orders. We have a nice comment section below each article here where you don’t have to enter name, email or anything (well, a real one anyway), so if you want to find a refuge from the daily, you know, feel free to comment and tell us what you think. Including perhaps that our comment section is rubbish so we should do x, y, z.

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