Ethereum, the second-largest cryptocurrency by market capitalization, is facing challenging times. Its price has been unable to break the $4,000 mark. It is causing concern among traders and investors. To understand the current market dynamics, it is useful to look at the behavior of participants in the futures market, as per CryptoQuant.
Ethereum Faces Downward Pressure as Futures Traders Sell
One important metric to consider is the Taker Buy Sell Ratio. This ratio measures the relative aggressiveness of buyers compared to sellers. A ratio above one indicates that buyers are more aggressive. On the other hand, a ratio below one shows that sellers are more dominant.
Take a look at the chart for the 7-day moving average of the Taker Buy Sell Ratio copy for Ethereum. Unfortunately, the ratio, which has never topped one, has been plummeting in recent days. That means sellers have since been more active in the futures market, keeping shorting, or betting on a further drop in prices or selling to cash in on profits from gains earlier this year.
And this type of sharp drop in the Taker Buy Sell Ratio is generally not a healthy sign for Ethereum. It indicates the majority of futures traders are bearish on Ethereum. Consequently, they anticipate the price of the cryptocurrency to decline even further.
In the macro context, there is a multitude of factors which could potentially turn this around. If good news like new partnerships, technological breakthroughs or regulatory approvals land itself in the news, it could return some investor confidence and we could see Ether price go back up.
Bearish Trend Persists for Ethereum, Data Indicates Further Decline
At present, data suggests a bear bias but it could change. This recent trend in the futures market also indicates Ethereum’s cost may fight more and potentially fall further. Market players need to pay attention and be ready for ongoing turbulent trading conditions.
Lastly, Ethereum’s price continues to remain pressured and breaks $4,000 barrier against Futures market. The Taker Buy Sell Ratio even suggests an advantage to the seller side, which is a bearish signal. However, the persistence of a general trend may continue if there is no fundamental change in market-side dynamics. During these uncertain times, investors must be aware and careful.
