The ether “looks weak” in the short term, but the long term star-news.press/wp

The ether may go for an unstable period in the short term, as the cost of the coated borrowing has increased and technical indicators indicate the evaluation, according to an encryption analyst.

“We believe that Ethereum looks weak in the short term,” said 10x Research Chief Markus Thielen for CointeleGraph on Wednesday.

“The market enters a quieter extension – especially in the United States during the month of August – while technical indicators remain at the height of deep purchase.”

Weth “less attractive” amid increased financing rate

Thielen explained that the great risk of ETHER (ETH) is the low profit opportunities of ether borrowing (Weth) – a symbolic version of ETLE widely used via decentral financing platforms (Defi).

The ether is trading at $ 3623 at the time of publication, an increase of 49 % over the past thirty days, According to To Nansen. The relative power of the asset against Bitcoin (BTC) increased by 34 % during the same period, According to To the percentage of Tradingvief Eth/BTC.

According to To the Thielen market report on Wednesday, the use of the AAVE (AAVE) lending platform increased from 86 % to 95 % since July 8, as borrowing over the offer available in the lending group.

“The variable cost of Weth borrowing has increased and is not profitable for the metaphor ETH now, and therefore there should be more pottery for those who borrowed ETH on AAVE,” Thielen explained.

“If this continues, this may lead to a significant relaxation, especially with the lack of financing and location rates,” he added.

Thynin is optimistic about the long -term horizons

Thielen explained that most of this request is borrowing from merchants who use the leverage in exhaustion strategies to enhance the return. However, he added that the current market environment has reduced the profitability of these deals:

“These strategies called” rings “remain profitable only when the ETH borrowing rates are low and the angry connection remains stable.”

Thyin said that more than 90 % of the ether loans use variable interest rates, which leaves borrowers exposed to sudden increases in borrowing costs.

Related to: The ether appears as a winner after “the moment of water gatherings” in Crypto: Bitwise

He said that when these changing rates rise as I did recently, he could “send ripple effects via the ethereum.”

Despite the potential opposite winds in the short term, Thielen expects a more suitable preparation for the ether after September.

Historically, the third quarter was the second quarter that works with performance in the ether, with an average return of 8.19 % since 2013, while Q4 is usually stronger, with an average return of 22.59 %, According to To Coinglass data.

magazine: Bitcoin inheritance: A guide for the heirs and dead that has not yet been

This article does not contain investment advice or recommendations. Each step includes investment and risk trading, and readers must conduct their own research when making a decision.