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Ethereum’s Merge confusion affecting top-trader sentiment — OKX Market Report

2022.08.05 Adam James

The cryptocurrency market has appeared to be unsure as to its next move over the past week — and that general sentiment is reflected in OKX exchange data. Top traders are exhibiting uncertainty about the leading crypto-market coins, BTC and ETH, though open interest for their futures is increasing. Ethereum’s impending transition from proof-of-work to proof-of-stake is also causing some confusion among top traders.

Let’s take a look at the data on OKX.

Key takeaways

  • Top traders on OKX appear to be unsure about whether or not BTC’s next move will be bullish or bearish.
  • Meanwhile, OKX’s top traders have suddenly experienced a wave of pessimism about ETH — likely due to Merge confusion.
  • Open interest for both BTC futures and ETH futures continues to rise but is stronger for the latter.

OKX top traders unsure about BTC’s next move

The sentiment surrounding BTC from top traders on OKX has experienced a sudden shift to the downside — though sentiment has been somewhat volatile throughout recent months. 

Nevertheless, top-trader sentiment has put in a series of higher lows throughout July and into August — indicating that mid- to long-term optimism is steadily increasing.

Top traders on OKX are experiencing mixed feelings about BTC at current levels. Source: OKX

The Merge causes concern among OKX’s top traders

Surprisingly, sentiment surrounding ETH from top traders on OKX has collapsed into pessimism — a likely result of confusion surrounding The Merge and an ongoing proof-of-work chain, temporarily dubbed ETHPoW. Many in the industry are unsure of what exactly will happen to their Ethereum-based nonfungible tokens, the decentralized finance market and an additional proof-of-work ETH coin.

Nevertheless, positive developments as we lead into The Merge could see top-trader sentiment shift back toward optimism.

Top traders on OKX have suddenly become more pessimistic about ETH. Source: OKX

BTC futures open interest still steadily increasing

Open interest for BTC futures on OKX has not increased as dramatically as for ETH futures, but it has still steadily put in a series of higher lows over recent weeks. Money is generally entering the BTC futures market as traders speculate on its next move.

However, futures trading interest is seemingly skewed toward ETH.

Open interest for BTC futures has increased steadily over recent weeks, but it hit a recent peak near the end of July. Source: OKX

Open interest for BTC options on OKX is also in a general uptrend, though expectedly volatile.

Open interest for BTC options has put in a series of higher lows. Source: OKX

ETH futures open interest seeing strong increases

Open interest for ETH futures has increased steadily throughout July and into August, and appears interested in further increases. This metric is generally indicative of trading interest for ETH — either long or short — as traders look to trade The Merge. In brief, money continues to enter the ETH market, as opposed to leaving it.

Open interest for ETH futures on OKX continues to rise steadily. Source: OKX

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

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