CRYPTO

Pro traders cut their EOS longs, but can hit the retail FOMO and $ 50K + BTC scale


EOS (EOS) started a downward trend 53 days ago and despite recent 27% weekly gains, Altcoin does not show a reverse sign. As a result, investors are questioning what the former top-5 cryptocurrency has in store since the resignation of Daniel Larimer, CTO of the developer behind EOS in late 2020?

EOS price on BitFinex in USD. Source: Tradingview

The emergence of competitive proof-of-concept smart contract platforms such as Solana (SOL), Polkadot (DOT) and Avalanche (AVAX) probably depends on this 2017-era project. According to data compiled by BitcoinTreasuries.net, Block.on, the company responsible for the EOS token launch, owns 160,000 bitcoins (BTC).

EOS may not be the smart contract network of choice these days, but a handful of functional money, games, exchanges, and decentralized social applications are running. The transaction cost for the user is negligible or usually covered by wallet or application, which makes it a great competitor for non-fingible tokens (NFT) and social networks.

Top decentralized app on EOS. Source: DappRadar.com

Having deep pockets is a great strategy to secure more than 300 million from investors, including Pip Thiel, Mike Novogratz and Alan Howard. The EOSIO developer came up with another 100 100 million cash injection for the Bullish Exchange, which completed its seven-week testnet on September 15th.

According to its website, all bullish exchange transactions and states will be verified and stored in the EOSIO-based blockchain, which will enable instant audit and integrity. In addition, the company expects to provide 3 billion in assets in bullish liquidity pools.

Retailers lost confidence after the September crash

To understand how confident traders are about EOS with the recent $ 4.50 support, one needs to analyze the futures data of the permanent deal. This device is the preferred market of retailers because its price regularly tracks the spot markets. Unlike quarterly futures, contracts near expiration do not need to be run manually.

In any futures contract trade, longs (buyers) and shorts (sellers) match all the time, but their leverage varies. As a result, exchanges will charge a funding rate for any party claiming higher leverage, and this fee will be paid to the opponent.

Neutral markets show a positive fund rate of 0% to 0.03%, equivalent to 0.6% per week, indicating that longevity is paying off.

EOS Permanent Future 8-Hour Funding Rate. Source: Bybt.com

The data reveals a complete absence of bullish bets since September 1 when the cryptocurrency market sank and the EOS fell from $ 5.25 to $ 4.15 in less than two days. However, the inability to raise the leveraged longs of the recent rally can be explained by the EOS price being 25% below $ 6.40 30 30% earlier.

Top traders sold at recent rallies

In order to understand how whale and arbiter desks can position themselves during this period, top traders should analyze the long-short ratio.

This indicator is calculated using clients’ combined positions, including spot, permanent and quarterly futures contracts. This metric provides a broad view of the effective net position of professional traders by collecting data from multiple markets.

OKEx Top Traders EOS Long / Short Ratio. Source: Bybt.com

As shown above, the 1.90 long-to-short ratio seen on October 3 still supports longs but it is the lowest level since the September 19 price crash. Interestingly, the recent 27% weekly profit has occurred while top traders are reducing their bullish position. Meanwhile, the current long.0 long-to-short indicator sits slightly below the previous -0 day average of 0.50.

Both retailers and pro traders are unsure whether the bullish exchange launch will be enough to break the prevailing bearish trend in mid-August. To regain the confidence of EOS investors, it seems essential to show that their decentralized applications are gaining traction as a result of competition in the NFT and DFI sectors.

The opinions and views expressed here are only their opinions Author And don’t necessarily reflect Cointelegraph’s opinion. Every investment and trading move involves risk. You should do your own research when making decisions.