Key takeaways:

• Retail investors are 94% long in Ether, which is often a contrarian indicator.

• ETH funding on Binance remains well and leverage is moderate and not euphoric.

• BitMine continues to accumulate, with over 300,000 ETH added to the reserve this week.

Ether (ETH) continues to trade below the key $4,000 mark, struggling to establish an uptrend following last Friday’s crash. The altcoin consolidated its 50-, 100- and 200-day exponential moving averages (EMAs), a technical zone that highlighted the constant competition between short-term and long-term market trends.

Retail long ETH positions dominate the futures market, but have opposing prospects

Despite the mixed technical setup, retail investors seemed to be aggressively betting on further gains. Data from trading resource Hyblock Capital showed that Ether’s long percentage of real retail accounts (TRAs) reached the 90th percentile, one of the highest levels among major crypto assets. Hyblok he said,

“True Retail Accounts Long% ranks high among many coins, recording percentile readings of 94% for Bitcoin, 90% for Ether and 86% for Solana.”

Surprisingly, the company added that retail long positioning is inversely correlated with price and is -0.86 for ETH, which means that when retail long positioning reaches extreme highs, the probability of a reversal increases.

The 90th percentile for long ETH positions suggests that retail sentiment is heavily skewed towards optimism (i.e. expectation of price increases). Historically, extreme retail positioning, especially when it reaches outlier territory (e.g. the 90th percentile), can act as a contradictory indicator.

This is because it could signal an overflow in long positions, potentially leading to a reversal if retail investors start to take profits or are liquidated.

Commenting on the derivatives market, cryptocurrency analyst Pelin Ay offered a more nuanced picture of market structure, noting that funding rates remain positive but subdued, signaling that long positions dominate the market, but not yet euphoric.

Ay explained that the current funding level of 0.01-0.03% indicates a well mid-stage uptrend, well below the overheated bullish level of 0.1-0.2% seen in 2021. The analyst added that moderate leverage and improving cash market demand could set the stage for a renewed rally towards $4,500-$5,000, while any sudden augment in funding above 0.05% could mean long positions are oversubscribed and trigger a short-term pullback.

Related: 95% of Corporate ETH Purchases Happened in Q3 – The Start of an Ether Super Cycle?

Institutional treasuries are buying ether’s decline

Vast-scale ETH holders are also benefiting from the recent pullback. Data showed that BitMine Immersion Technologies, chaired by Tom Lee, raised 104,336 ETH worth about $417 million on Thursday.

This comes on top of BitMine’s earlier acquisition of over 202,000 ETH on Sunday, with the current market value of ETH reserves standing at $9.3 billion. Despite recent volatility, Lee maintained his year-end target of $10,000 per ETH, supported by growing institutional and spot market demand.

Related: Ethereum Confirms Bearish Signal That Drove ETH Down 60% Last Time

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.