Bears Be Careful, Ethereum (ETH) May Yet See Further Upside Against Bitcoin

Ethereum (ETH) is often the go to currency for futures traders because of larger moves and higher funding rates than Bitcoin (BTC). In other words, it pays better to be short on Ethereum (ETH) than on Bitcoin (BTC). However, it comes with its risks. As we have seen recently, BTC/USD has been trading sideways for the most part but not Ethereum (ETH). The 4H chart for ETH/BTC shows how Ethereum (ETH) has been in a constant uptrend against Bitcoin (BTC) in the recent past. The pair has now pierced through the 200 EMA and found support on the 38.2% fib retracement level. This has now increased the probability that we could see the next fib circle tested from above.

The vast majority of retail traders remains bullish on Ethereum (ETH) and thus has no problem paying high premiums to keep their bullish positions open. Retail bears on the other hand have been aggressive and trying to profit off the high funding rates but the market makers have been attempting to shake them out at numerous points. Their priority at this point is to slow bleed the retail bulls for the time being while discouraging the bears from shorting the market. Then when enough longs have stacked up and everyone is all bullish, they will begin the stop hunt to shake out the bulls. It is going to be a chain reaction because the first few zones of stops being hit will lead to the price declining lower which will in turn hit more stops below. We have seen this happen below and I have no doubt it will happen again but it is very important to be patient.

The reason we are talking about the bearish setup is because the cryptocurrency market remains in a bear trend. The 1H chart for ETH/USD shows that Ethereum (ETH) entered a short term uptrend recently but this is not going to last for long. It may result in further upside from current levels and I would not be surprised if we see a manipulated pump towards $200 to shake out more bears. However, the big picture remains intact and so does the bearish setup.

If Ethereum (ETH) were to decline from here, it would be expected to fall down to $144 in the weeks ahead which would be a big move to trade from current levels. Most traders like to keep their positions open over a long time rather than day trading. Now that Bitcoin (BTC) has declined below the 200 day moving average, a lot of traders would be quite comfortable keeping their shorts open for longer than when the price hits $144. They might keep them open till ETH/USD reaches $80 or lower levels. This explains the desperation of the market makers and the whales to shake out the bears at this point so as not to let that happen.