Ether Price Analysis: Bulls Unfazed by Surprise Sell-Off Below $3.7K
The recent sell-off of Ether (ETH) below $3,700 has left many investors wondering about the future of the cryptocurrency. Despite a 9.5% drop on Friday, which triggered $232 million in leveraged long liquidations in 48 hours, Ether bulls remain cautious but not bearish. The ETH futures premium and whale activity suggest that traders are avoiding heavy leverage, even as bank stocks recover from recent credit worries.
The ETH derivatives data shows moderate concern among bullish traders, but whale positioning suggests that most do not expect a deeper decline. The key question now is whether the $3,700 support will hold as macroeconomic risks increase. According to 
Macroeconomic Risks and Credit Concerns
The S&P Regional Banks Select Industry Index recouped some of Thursday’s losses to trade 1.5% higher on Friday. However, credit concerns have left their mark on larger financial institutions such as JP Morgan (JPM) and Jefferies Financial Group (JEF), both of which reported losses related to the auto sector. According to Yahoo Finance, auto lending is experiencing the fastest growth among U.S. banking segments. Joachim Nagel, President of the Deutsche Bundesbank and member of the ECB Governing Council, warned of possible “spillover effects” from the private credit market and called it a “regulatory risk”.
The monthly ETH futures premium compared to spot markets fell to 4%, below the neutral threshold of 5%. Trader sentiment had already been shaken by the flash crash on October 10, and the last significant upside occurred in early February. Ether traders appear to be increasingly doubting the strength of sustained upward momentum, as shown by 
US-China Trade Tensions and ETH Whales
Part of traders’ unease stems from deteriorating U.S.-China relations as the ongoing trade war enters a new phase that includes export controls on rare earths and sanctions against a South Korean shipping company. US President Donald Trump said on October 10 that the US could respond with an additional 100 percent tariff on Chinese goods starting November 1. To determine whether Ether whales are truly betting on further downside or are simply hedging in the face of deteriorating macroeconomic conditions, it is helpful to examine the positioning of top traders on derivatives exchanges.
Top traders on Binance reduced their bullish bets (longs) Tuesday through Thursday, but later reversed course and increased their exposure to ETH despite continued price weakness. In contrast, top traders at OKX attempted to time the market by increasing their exposure near the $3,900 level but eventually exited as prices fell to $3,700 on Friday, as shown by 
The ETH derivatives markets are not showing any alarming signs – quite the opposite. Bulls’ hesitancy to take leveraged positions seems healthy, especially after the extreme volatility of October 10th. However, Ether’s path towards $4,500 will likely depend on clearer signals from credit conditions and US jobs data, meaning a recovery could take some time. For more information, visit https://cointelegraph.com/news/eth-bulls-unmoved-by-surprise-sell-off-below-3-7k-here-s-why?utm_source=rss_feed&utm_medium=rss_category_market-analysis&utm_campaign=rss_partner_inbound
