Decline In Ethereum Futures On CME Suggests Institutional Investors Are Still Bearish
June 30 2022 - 7:00PM
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Institutional investors have been bearish toward Ethereum for a
while now. There have been outflows rocking the digital asset until
it ended its 11-week streak with inflows for last week. However,
this does not mean that positive sentiment had returned entirely to
the cryptocurrency once more. The numbers on the CME show that
institutional investors remain wary and even bearish toward the
second-largest cryptocurrency in the market. Ethereum Falls
Into The Negative The Ether futures on the CME have been trading on
a negative basis lately, which basically means they are trading
below spot. This has caused the Ether Futures on the come to
decline to the lowest they have ever been since inception.
The Ether-denominated open interest on the CME had previously
claimed a new all-time high back in April. But since then, has
continued to decline, with more drops recorded over the last
weekend. This has spelled a bad streak for the month of June.
Related Reading | Outflows Rock Bitcoin As Institutional
Investors Pull The Plug, More Downside Coming? As the month draws
to a close, the three-month Ether basis has now decoupled from
bitcoin and has been trading below spot, which had been recorded on
June 23rd. Hence marking the first time that the Ether basis would
ever decline so low. ETH futures on CME in decline | Source: Arcane
Research Asset managers have now moved to a predominantly bearish
stand following this. It has been recorded that they have been net
short on Ethereum since mid-June when it stood at $37 million. This
number has since dropped but only slightly to be resting at the $32
million that was recorded last week. The Ether futures basis is now
sitting at a -2.33% while bitcoin remains at 0.63%. ETH Struggles
To Hold $1,000 The bearish sentiment towards Ethereum has not been
relegated to just institutional investors alone. The spot markets
are also feeling the heat as sell-offs have resumed. In light of
this, the digital asset has had a hard time holding the $1,000
level. ETH struggles to hold above $1,000 | Source: ETHUSD on
TradingView.com This level is significant for Ethereum due to the
fact that there is support mounting here. However, it is a very
critical technical level given that if the price were to decline
below this point, resistance would quickly build up around it. Any
support below $1,000 is incredibly weak, so a dip from here would
likely see the price touch $800 before there is any recovery.
Related Reading | Ethereum Plugs 11-Week Bleed, why $1,500 May
Be On The Horizon Ethereum is now trading firmly below its 20-day
moving average which has wiped out all hopes for a bullish recovery
in the short term. Additionally, as the 3AC liquidation comes into
focus, the implications for digital assets such as ETH remain very
negative. Featured image from Admiral Markets, charts from Arcane
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