Ether price moves towards new record

Ether (ETH) price experienced a 19.6 percent correction on April 18, and a $ 1 billion long position was liquidated. Despite the record-breaking liquidations and impact on the Ether price, futures’ open positions remained above $ 20.5 billion, just 5 percent lower than the previous month.

After the sales, investor sentiment decreased, as can be seen in the derivatives markets.

Historically, there has been much greater demand for Ether long positions to borrow than for short positions. In the past days, the long / short position ratio has reversed and declined to the lowest levels seen since December 2018.

Ethereum Price Index: How many TL (ETH TL) for Ether?

Open positions of ETH futures. Source: Bybt

There are no reports that could justify the price correction, as Ether is not directly related to the depreciation of Coinbase stocks or the drop in Bitcoin hash rate.

Still, investors are right to worry about possible harsh cryptocurrency regulations. Over the weekend, rumors began circulating that the US Treasury Department would complain about money laundering from some crypto-using financial institutions.

Treasury Secretary Janet Yellen said in a statement in February that the use of cryptocurrencies in illegal activities causes concern. The Ministry’s Financial Crimes Prevention Network signaled that the statement of financial accounts in foreign countries may also include digital currencies.

Therefore, the more interest of investors in Ether short positions may be due to possible legal changes. With its all-time high of $ 2,550, Ether is trading at around $ 2,493 as of the time of translation broadcast.

Ether price (orange) and Ether long / short position ratio (blue) on Bitfinex. Source: TradingView

As the chart above shows, the average demand for Ether long positions on Bitfinex exchange has been 65 percent higher than short positions over the past few months. On April 20, this indicator reversed and short positions started to dominate.

The density of the Ethereum network is also one of the reasons investors are more careful. The average transaction fee of the Ethereum network approached $ 16 in recent months, making the network dysfunctional for those who want to do relatively smaller transactions.

Whatever the reason behind the change in Bitfinex’s long / short position ratio, there is no more valid indicator than Ether has gained 20 percent in the last four days. Ether, on the other hand, seems to be on the way to breaking a new record.

The opinions and views expressed herein are those of the author alone and do not reflect the views of Cointelegraph. Every investment involves risk. Do your own research before making a decision.

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