Ethereum Price Bullish on Upcoming Constantinople Hard Fork but ETH Long/Shorts Paint an Ugly Picture
There are about 5 days left in the Ethereum Constantinople hard fork that is scheduled for the last day of February. This upgrade that will activate at Block 7280000 has the Ether price surge in the past week about 21 percent.
At $148.65, Ethereum has been trading with 0.24 percent gains in the past 24-hours. The second-largest cryptocurrency is expected to see even more gains on the back of the upcoming Constantinople upgrade as traders project $160 and even $170 the target price for Ether in the next few days. If Ether does manage to reach this point, a short term rally can be expected to further bring more gains.
However, according to Alex Kruger, an economist, and trader, the narrative might be bullish but the event in itself is a bearish one as he says,
“Constantinople this time around should *not* be a short term bullish event. But narratives matter and the narrative says bullish, and some big fish loaded up on ETH recently.”
As for why Constantinople hard fork is not a bullish event he had previously shared that the fork is “fundamentally” bearish as by postponing the time bomb,
“the fork will result in a smaller supply reduction.”
“Need to differentiate between, ETH issuance dropping, which has been happening noticeably since December, and the fork, which will result in *higher* issuance than without it. The fork will stabilize ETH issuance at levels about 1/3 lower than November's.”
If we take a look at the daily supply chart of Ethereum, on February 17th, the first time in Ethereum’s history the daily supply went below 13k at 12,989. Since, December the supply issuance has been below 20k, and constantly on the drop to 13k.
The Ugly Picture
Meanwhile, the long/shorts ratio is reaching the high of November just before the market crashed 60 percent as Rptr45 says,
“When the ETH ratio gets up to these levels forward performance is ugly with ~0 incidences of positivity in 10-20 days out with average reversion of -16.5% / -30%. The last time it got this extreme predated the Nov sell-off.”
“Last time ETH longs/shorts ratio was this high was before the November 60% crash. Constantinople comes Feb/25. Cryptos often raise in anticipation of a fork -long the narrative- reach a local top days before, and crash into the fork. Mind the current crypto pump was ETH driven,”
With this level so high, it could be expected the market would drop to a new low as has been projected by many cryptoanalysts.
And this could be the reason while crypto traders are bullish on Ethereum price, one trader i.e. UB is not as much as he says,
“ETH – ETH stalling at the Area of Interest makes an argument for distribution. A chart that looks like this (little to no pullback on a run up) isn't something I would long. I'm looking at a pullback as far as ~122. Yes, I know Constantinople etc. I trade the charts.”