The Ethereum price is dropping near the key support, but traders are wary of opening short positions

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The price of Ethereum is hovering at a critical support level. While it is slowing down, data shows that pro traders are not reluctant to sell short. Market Analysis Ether (ETH), which is a cryptocurrency, has been stuck between $1170 and $1,350 since Nov. 10, which is a narrow 15% range. Traders continue to process the negative effects of the Nov. 11 Chapter 11 bankruptcy filing by FTX exchange. Ether’s total market volume, which was $4.04 billion per daily, was 57% higher than it was the week before. This is especially relevant given the collapse of Alameda Research (the arbitrage and market-making firm that controlled FTX), which saw Ether’s total market volume rise 57% to $4.04 billion per day. Uniswap and 1inch Network saw a 22% increase of active addresses between Nov. 8 and 9. One can borrow USDT (or Ether) to buy Ether, increasing their crypto exposure. Borrowing Ether, however, can only be used to buy it or bet on a price decline. Margin lending ratios that are high indicate a bullish market. A low margin lending ratio (OKX USDT/ETH) indicates a bearish market. Source: OKXThe chart below shows that investors’ morale reached its peak on Nov. 13, when the ratio hit 5.7, which was the highest level in two months. Source: OKXThe chart above shows that OKX traders had a high level of morale on Nov. 13, when the ratio reached 5.7, the highest in two months. It is worth highlighting that the overall sentiment improved since Nov. 8 as traders increased demand for margin longs using stablecoins.Related: Genesis Global halts withdrawals citing ‘unprecedented market turmoil’Long-to-short data shows reduced demand for leverage longsThe top traders’ long-to-short net ratio excludes externalities that might have solely impacted the margin markets. Analysts can better understand whether professional traders are bullish or bearish by aggregating positions on spot, perpetual, and quarterly futures contracts. Source: Coinglass The long-to-short ratio of Huobi was 0.98 between Nov. 8, and Nov. 15, which indicates a balanced situation between sellers and buyers. Binance traders experienced a contraction in long demand initially, but this was quickly subdued by buying activity. According to the long-to short indicator, top traders reduced their longs up to Nov. 10, but then increased their long positions. However, derivatives analysis shows that neither margin markets nor futures have excess demand for shorts. If panic-based sentiment had prevailed, one would expect worsening Ether lending conditions and long-to–short indicators. Bulls are now in control, as traders aren’t comfortable taking bearish positions when ETH is below $1,300. You should do your own research before making any investment or trading decision.