Data shows pro traders are currently more bullish on Ethereum than Bitcoin

Data shows pro traders are currently more bullish on Ethereum than Bitcoin

Most trers have noticed that Ether (ETH) price has seriously outperformed Bitcoin (BTC) for months now and the ETH/BTC ratio has rallied more than 230% in 2021 and recently hit a new high at 0.089 BTC on Dec. 9. 

ETH/BTC pair at Coinbase. Source: TringView

To put things in perspective, Ether’s $490 billion market capitalization currently represents 54% of Bitcoin’s $903 billion. This ratio finished 2020 at a mere 15%, so it is safe to conclude that some ‘flippening’ has occurred. It might still be far from what Ethereum-maximalists imagined, but it is still quite a respectable run.

Inste of analyzing the rationale for the move or, even worse, predicting the outcome based on some loose expectations, analysts should explore the market structure of each coin individually.

For example, is the futures’ market premium facing a similar trend on both coins and how does the pro trers’ long-to-short ratio compare? These are the most relevant metrics to determine whether a movement has the strength to continue.

The futures premium favors Ether

Quarterly futures are the whales and arbitrage desks’ preferred instruments but because of their settlement date and the price difference from spot markets, they might seem complicated for retail trers. However, these quarterly contracts’ most notable vantage is the lack of a fluctuating funding rate.

These fixed-month instruments usually tre slightly above spot market prices, indicating that sellers are requesting more money to withhold settlement longer. Consequently, futures should tre at a 5% to 15% annualized premium in healthy markets. This situation is known as “contango” and is not exclusive to crypto markets.

Bitcoin and Ether futures basis. Source:

After comparing both charts, we can see that Bitcoin futures tre at an average 2.6% annualized premium for March 2022 and 4.4% for June 2022. This compares to Ether’s 2.9% and 5%, respectively. As a result, it becomes clear that whales and arbitrage desks are demanding a larger premium on Ether and this is a bullish indicator.

Bitcoin’s long-to-short ratio declined

To effectively measure how professional trers are positioned, investors should monitor the top trers’ long-to-short ratio at leing crypto exchanges. This metric provides a broer view of trers’ effective net position by gathering data from multiple markets.

It is worth noting that exchanges gather data on top trers differently because there are multiple ways to measure clients’ net exposure. Therefore, any comparison between different providers should be me on percentage changes inste of absolute numbers.

Bitcoin top trers long-to-short ratio. Source: Coinglass

The long-to-short ratio for top Bitcoin trers currently stands at a 1.21 ratio average, down from the 1.39 on Dec. 5. Compared to the 1.59 figure from two weeks ago, this signals that buyers (longs) reduced their exposure by 24%. Once again, the absolute number has less importance than the overall change in the time frame.

Ether top trers long-to-short ratio. Source: Coinglass

Meanwhile, Ether whales and arbitrage desks showed a positive sentiment change from Dec. 5 after the long-to-short moved to 1.16 from 1.0. When comparing the average data from Nov. 25, top Ether trers’ long-to-short have been cut by 20% from 1.43.

Data shows Ether trers are more confident than Bitcoin trers

Current derivatives data favors Ether because the asset currently shows a higher futures basis rate. Furthermore, the improvement on the top trers’ long-to-short since Oct. 5 signals confidence at a delicate period when ETH price is down 16% from its $4,870 all-time high.

Bitcoin investors may be lacking confidence as its price stands 31% below the $69,000 all-time high on Nov. 10. There’s no way to know whether this is a cause or consequence. Still, judging by the futures premium and long-to-short data Ether seems to have enough momentum to keep outperforming.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and tring move involves risk. You should conduct your own research when making a decision.

ARTICLE: Data shows pro trers are currently more bullish on Ethereum than Bitcoin
PUBLISHED: 2021-12-09 22:05:11 
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