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Are more crypto traders shorting Ether in the derivatives market ahead of 'The Merge'?

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CryptoRuby wrote a column · Sep 13, 2022 03:15
Search engine giant Google, a unit of $Alphabet-C(GOOG.US)$ $Alphabet-A(GOOGL.US)$, is sharing details of the Ethereum Merge and counting down the time for the highly anticipated event for $Ethereum(ETH.CC)$.
Are more crypto traders shorting Ether in the derivatives market ahead of 'The Merge'?
This has been seen as one of the biggest events in cryptocurrency for 2022, the Ethereum Merge could change the outlook of cryptocurrency going forward.
Ethereum has often been used and cited as a network for leading companies and NFTs, but also faced pushback for its high energy usage. The Merge will change Ethereum from a proof-of-work cryptocurrency to a proof-of-stake cryptocurrency, a move that is said to use less energy.
However, more crypto traders are shorting Ether in the derivatives market, as the underlying blockchain is scheduled to go through its biggest technical upgrade this week, trading data shows.
Source: Kaiko
Source: Kaiko
The funding rates of $Bitcoin(BTC.CC)$ and Ether perpetual futures contracts diverged sharply over the past weekend, according to crypto data firm Kaiko. The funding rate for Ether dipped to its most negative since July 2021. Exchanges use the funding rate - or the cost to trade - to tether the contracts to their underlying spot price. When the rate is positive, those who hold long positions are paying interest to investors who are short, and vice visa.
With the Merge happening this week, it could be that folks are hedging as the price of ETH has mostly increased while funding rates have gone negative.”
—— said Andrew Tu, head of growth for crypto algorithmic-trading firm Efficient Frontier.
GlobalBlock analyst Marcus Sotiriou touched on "The Merge" or Ethereum's shift to a proof-of-stake mechanism from a proof-of-stake mining model and said it will be good for the coin and the wider cryptocurrency space in the long term.
Mooers, what do you think of 'The Merge'? Leave your comments below please!
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    CryptoRuby
    Crypto news and opinion. ༼ つ ◕_◕ ༽つ Crypto enthusiastic (Not a financial advisor)
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