Ethereum's Downhill Slide: A Trader's Bold Bet

Ethereum's value has taken a hit, falling about 10% in the last month. This drop has some traders betting against it, thinking the rally might not happen. One trader, Taiki Maeda, has placed a big short bet of $1 million on Ethereum. He believes the much-talked-about Q4 rally might not come. He thinks the market is already in a downtrend, or bear market. Maeda points to a big liquidation event on Oct. 10 as the start of this downtrend. He argues that many traders are still using old patterns from 2017-2021, which might not apply now. He describes the current situation as "trickle-down dumpanomics. " This means that as other cryptocurrencies, or altcoins, lose value, Ethereum's big valuation of $500 billion is at risk. He also notes that activity on the Ethereum network is weak. Maeda is not convinced by the positive stories around stablecoins and tokenization. He says these do not bring in much fee revenue for Ethereum. Instead, they benefit private companies like Robinhood, which has integrated with Arbitrum. Despite his bearish stance, Maeda says he is a "bull at heart. " He is focused on managing risk and prefers to make money from short positions rather than taking big risks on long positions. He remains optimistic about Bitcoin, expecting it to reach $150, 000 by the end of the year. He thinks Bitcoin will not be affected by the weakness in altcoins. Maeda also warns that returns from yield farming could decrease as retail demand fades. This could push stablecoin yields down from 25%. Additionally, selling by institutional investors, like Sequins moving BTC to Coinbase, could add more downward pressure on the market.