As Ethereum utilizes climbing

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Bitcoin has recovered its base, recovering about $110,000 as short-term political controversy triggered a decline last week. Despite the rebound, many traders remain hesitant, showing caution even if asset trading is within 2% of its all-time high.

Analysts noted that key market indicators reflect an ongoing atmosphere of “unbelievable”, with participants choosing to remain risk-averse until macroeconomic data is released.

According to the latest report from K33 Research, the lack of bullish belief in the derivatives market is worth noting. Negative capital rates and flat leverage inflows are one of the most obvious signs.

These conditions suggest that assembly may be driven by potential demand rather than speculative impulses. Historical patterns show that during such negative emotions and light positioning periods, bitcoin is rarely on top, which often lays the foundation for potentially higher leg stages.

Bitcoin fund data reflects conservative positioning

Vetle Lunde, head of research at K33, noted that Binance’s BTC/USDT permanent contracts fell on Friday and Sunday, while the weekly funding average was only 1.3%, and the age was typically 1.3%, which is usually seen at the local bottom in the past two and a half years.

In this case, traders will usually pay to keep the shortage, reflecting the prevailing bearish bias despite price recovery. Lund stressed that this bearish sentiment could serve as fuel for future breakthroughs.

Additionally, the volatility data has 2x utilization of long Bitcoin ETFs (BITXs) adds a cautious narrative. The fund held only 52,435 BTC exposure, significantly lower than the 76,755 BTC peak in December.

Unlike previous gatherings in March 2024 and November 2024, inflows into BITX remain flat in the last month, suggesting that traders avoided positive bullish exposure through leverage. Analysts believe this defensive setting could lead to a slump in mood, which could lead to an unexpected surge.

See Leverage Peak for Ethereum Derivatives as ETF Stream Climbs

Although Bitcoin remains soft in terms of leverage, the Ethereum market has witnessed an increase in speculation. The Ethereum ETF (ETHU) with volatility has attracted great attention and has become a major player in the ETH derivatives space.

According to K33, ETHU has increased exposure to more than 305,000 ETH since April 8, surpassing the increase in CME ETH open interest during the same period.

ETHU now represents 18.3% of ETH held by all ETFs in the United States, and two-thirds of the open interest of CME ETH. This is in sharp contrast to BITX, which accounts for only 4.3% of the US Bitcoin ETF holdings.

The sharp rise in ETHU position shows that even if there is no similar activity in the Bitcoin space, the demand for leveraged Ethereum exposure will increase. Lund interprets it as a signal of traders positioning the upward movement of ETH, possibly before policy development or basic catalysts.

Feature images created with DALL-E, TradingView’s chart

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