Ethereum
Ethereum perps are seeing a massive plunge in funding rates as traders actively seek to hedge ahead of the merge, a buy-the-news story in the making?Preview
Three strategies may fuel the aggressive shorting:
- Cash neutral exposure, with a 1:1 allocation of ETH spot vs. ETH shorts. If the funding rate remains as low as now, and such a short is held until the merge, hedgers will pay 2.4% in fees for an airdrop token which is currently valued at 1% of the ETH market cap.
- Hedging a failed merge. If the merge succeeds, shorts may unwind. Prices may react positively to this flow if spot positions are maintained.
- Downright bearish bets on Ethereum, either due to a failed merge or a classic sell-the-news event.
Bitcoin
CME basis recovers
CME’s period in backwardation ended last week, driven by ETF traders reducing their downside exposure in anticipation of potential upside in BTC.Preview
Funding rates climbing to neutral levels
Funding rates reached neutral levels amid BTC’s Friday recovery.Preview
BTC denominated open interest at all-time high
Open interest in perps sees further growth – now sitting at 418,000 BTC. BTC denominated open interest in perps stays high and reached a new all-time high last Wednesday of 421,000 BTC before experiencing a minor setback amid the Friday short squeeze.Preview