Bitcoin and Ethereum derivatives traders have adopted opposite positions, with data showing long bets on BTC and short positions on ETH following recent market volatility. The divergence emerged after Bitcoin maintained bullish sentiment despite flash crashes, while Ethereum's derivatives market turned bearish.
What Happened: Derivatives Divergence
Derivatives data from Santiment shows Bitcoin's Funding Rate remained positive after the cryptocurrency rallied to $90,300 before crashing to $85,300 within hours.
The indicator tracks periodic fees that derivatives traders pay on centralized exchanges, with positive values indicating long positions outweigh shorts.
Ethereum followed a different pattern. After surging to $3,000, ETH dropped to $2,790 from pre-volatility levels around $2,920, and the Funding Rate turned negative.
The shift signals short positions now dominate Ethereum derivatives markets. Bitcoin traders maintained bullish bets despite similar price swings.
Also Read: XRP Tests Support Levels Following Decline From $1.93
Why It Matters: Volatility Risk
Santiment analysts say Ethereum's negative Funding Rate may reduce volatility risk, as highly leveraged long positions historically trigger sharp liquidation events. Recent market tops and pullbacks followed similar patterns of excessive bullish positioning.
Bitcoin's long-heavy market presents continued risk.
"All assets will still move with Bitcoin, meaning Bitcoin's funding rates must stay neutral or go negative in order to justify a clear path back to $100K and for altcoins to rebound," Santiment's analysis shows.
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