Summary
Traders expected bitcoin to outperform ether, but after the ether-bitcoin ratio dropped, ETH’s market rise caused a shift in market positioning and an increase in funding rates. This led to a rise in short covering in ETH front-end call options.
Key Points
1. Traders were positioned for bitcoin leadership after the ether-bitcoin ratio dipped below key support last week.
2. ETH’s market-beating rise has brought rapid adjustment in market positioning, leading to a sharp uptick in the perpetual funding rates or cost of holding long/short positions, according to Singapore-based QCP Capital.
3. The upside volatility in ETH has also led to a significant short covering in ETH front-end call options.