2.2% of All Ethereum Is Long on Bitfinex: 3 Reasons Why This Could Go Wrong

Despite the persistent price reductions of Bitcoin, Ethereum and other top cryptocurrencies, investors remain very optimistic about this market. ETH in particular has benefited from traders, with data from the leading crypto exchange Bitfinex, indicating that there are more long positions open to Ethereum than ever before.

“What. Is. Happening. 2.2% of all ETH in existence is now marginally long on Bitfinex, up 160% since ~ February,” explained a trader referring to the chart below. “

Ethereum chart requires Bitfinex (ETHUSD and ETHBTC) from crypto trader Jonny Moe (@JonnyMoeTrades on Twitter).

However, there are signs that this investment activity could end badly for long position holders.

Related reading: There is an unexpected silver lining for J.K. Rowling’s Bitcoin Tirade

# 1: Exchanges hold more ethereum than ever before

Ethereum’s holdings of crypto exchanges are ‘in fact the highest level ever’ and recently reached around 18 million coins, according to a prominent crypto analyst.

According to him, this may be a bearish sign for ETH, probably referring to how it indicates that investors want to sell the cryptocurrency for other tokens of fiat.

“In fact, ETH balances are at their all-time high and are increasing by 132k ETH (~ 26M) since Black Thursday … My interpretation here is that it is bullish for btc / bearish eth,” he wrote in a Twitter thread on cryptocurrencies that replace wallets.

Data shared by crypto analyst Ceteris Paribus (@ Ceterispar1bus on Twitter).

Data shared by crypto analyst Ceteris Paribus (@ Ceterispar1bus on Twitter).

# 2: Ethereum technical outlook is weak

As noted by NewsBTC earlier today, Ethereum’s monthly chart just printed a textbook “Doji” candle, indicating that “indecision is present in the market” because “buyers and sellers show a similar amount of strength.”

Doji candles can signal a pause and possible subsequent reversal in a market trend. With ETH rallies in the past two months, the Doji could be seen as a sign of bearish indecision in an upward trend.

ethereum doji price chart monthly ethusd

Chart from TradingView.com

That is far from it.

According to a prominent crypto traderRecently, ETH fell below a critical support level held four times in the past month, increasing the likelihood of a “bigger correction”.

Graph of Ethereum's recent price promotion from Credible Crypto (@CredibleCrypto on Twitter). The chart shows that the leading cryptocurrency recently lost a support level held four separate times in the past three weeks, which is not good for the bull case.

Graph of Ethereum’s recent price promotion from Credible Crypto (@CredibleCrypto on Twitter). The chart shows that the leading cryptocurrency recently lost a support level held four separate times in the past three weeks, which is not good for the bull case.

# 3: Altcoins are bearish

To put the icing on the cake, analysts are increasingly bearish on altcoins as an asset class.

Josh Olsewicz of Brave New Coin noted last week that the chart of Bitcoin dominance – the percentage of the crypto market made up of BTC as opposed to altcoins – has pushed a gold cross out of the textbook.

Investopedia notes this A gold cross occurs when a “relatively short-term moving average exceeds a long-term moving average”, and is often followed by a “bullish breakout”.

Related Read: Crypto Facts: Bitcoin Halving, Reddit Using Ethereum, JP Morgan Dabbles in Crypto
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