Quant Explains How Whales Moved Before And After Ethereum Merge

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One volume has explained how whale movements differ before and after the Ethereum merge goes live.

Ethereum funding rate hits lowest level just before merger

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As told by an analyst at Cryptoquant PostA lot of ETH investors bet on a drop in the price around the completion of the merge.

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The relevant indicator here is the “financing rate”, which measures the periodic fees that perpetual futures contract traders exchange between each other.

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

On the other hand, negative values ​​of the indicator suggest that the shorts are overshadowing the longs at the moment as most of the people are experiencing a bearish trend.

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

Ethereum Funding Rate

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

As you can see in the above graph, the Ethereum funding rate was going down just a few days ago, and hit a new negative peak as the merge occurred.

Quantity suggests that this was because investors thought the PoS transition hype had already hit the market, and so they bet on short positions, assuming the price would drop after the much-anticipated event.

But right after the merge, the price actually saw a slight improvement. Seeing that the fall they had been waiting for did not come, these short holders quickly began closing their positions, raising funding rates rapidly.

As soon as this happened, the waiting whale jumped in and threw away their ETH, causing a huge drop in the price. The analyst noted that this is a performance of whales trying to move in a way that gives them the biggest gains. “To read those moves, we need to use both on-chain data and charts,” says Quantity.

ETH Price

At the time of writing, the price of Ethereum is down 7% over the past seven days to around $1.4k. In the past month, the value of crypto has fallen by 24%.

The chart below shows the coin’s price trend 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 trending down since the merger, and it is not yet clear when the crypto might show some reversal.

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

Credit : www.newsbtc.com

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