Quant explains how whales moved before and after the Ethereum merger


A quant explained how the movement of the whales differed between before and after the Ethereum merger.

Ethereum funding rates hit an all-time low just before the merger

As one analyst pointed out in a CryptoQuant article, many ETH investors are betting on the price falling around the completion of the merger.

The relevant indicator here is the “funding rate,” which measures the periodic fees that perpetual futures traders trade with each other.

When the value of this metric is positive, it means that long investors are paying a premium to short holders right now to hold their positions. Such a trend shows that a bullish sentiment is more dominant in the market right now.

On the other hand, the negative values ​​of the indicator suggest that the shorts are overtaking the longs right now, as the majority is feeling bearish.

Now, here is a graph that shows the trend of Ethereum funding rates over the past few days:

Looks like the metric had a deep red value not too long ago | Source: CryptoQuant

As you can see in the chart above, Ethereum funding rates only dropped a few days ago and reached a new negative peak just around the time of the merger.

The quant explains that this was because investors thought the PoS transition hype had already impacted the market, and so they bet short positions, thinking the price would drop the day after the event. so anticipated.

But right after the merger, the price actually saw a slight improvement. Seeing that the drop they expected did not happen, these short holders quickly began to close their positions, causing funding rates to rise sharply.

Just when this happened, the waiting whales jumped up and threw their ETH, causing the price to plummet. The analyst notes that this is a demonstration of whales trying to move in a way that brings them the biggest payoffs. “To read these moves, we need to use both data and chain charts,” the quant explains.

ETH price

As of this writing, Ethereum price is hovering around $1.4k, down 7% in the past seven days. Over the past month, the crypto has lost 24% in value.

The chart below shows the price trend of the coin over the past five days.

Ethereum Price Chart

The value of the crypto seems to have been going down during the last few days | Source: ETHUSD on TradingView

Ethereum has been on a downward trend since the merger, and at the moment it is unclear when the crypto may show a reversal.

Featured image from Thomas Lipke on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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