NEWSLETTER
The price of Ether (eth) fell 9.3% between March 26 and 28, testing the level of $ 1,860 for the first time in two weeks. This correction led to more than $ 114 million in Liquidations of Futures eth leveraged and caused the premium in relation to the regular spot market to fall to its lowest level in more than a year.
Some merchants have said that the eth future premium with a rock background is a lower signal, but let's deepen the data to see if this perspective makes any sense.
eth 1 month of future premiums in relation to spot markets. Source: Laevitas.CH
Ether monthly futures are generally negotiated above the regular spot price as sellers require compensation for the longest liquidation period. An annualized premium from 5% to 10% generally indicates neutral markets, reflecting the cost of the opportunity and the risk of exchanges. However, the future eth fell below this threshold on March 8, after a 24% price correction in the previous two weeks.
The current 2% 2% eth annualized premium suggests a lack of length of lengths (purchases), but this measure is very influenced by recent price movements. For example, on October 10, 2024, the premium of the future eth fell to 2.6% after a pricing 14% in two weeks, but the indicator increased to 7% since eth recovered most of its losses. Essentially, the premium of futures rarely indicates changes in the tendency of spot prices.
eth whales fear that the ether price falls more
To determine if the whales have lost interest in the ether, it is crucial to observe how the market is the price of fixing options (sale) compared to the call options (buy). When merchants anticipate a bearish trend, 25% of Delta's bias metric increases above 6%, indicating a greater demand for coverage strategies. In contrast, periods of optimism generally push bias below -6%.
Ether 1 month options 25% Delta Skew (Put-Call). Source: Laevitas.CH
Currently, with 7%, the eth '25% Delta Skew options suggests a lack of condemnation among professional merchants, which increases the probability of a higher bearish impulse.
From the perspective of the derivative market, there are few indications that the recent eth price correction has touched the bottom. Essentially, investors do not trust that the $ 1,800 support will remain.
Some analysts argue that the strong decrease in the activity of the ethereum network is the main reason for the reduced eth attraction, while others suggest that the change towards the scalability of layer 2 has significantly decreased the potential of the rates of the base chain. Given the need to compensate for the validators of the network, the lack of capital entry requires more eth issuance, which negatively affects the net yields of native participation.
The ethereum Network faces strong competition
Trying to identify the reasons behind the motivations of the vendors is useless, especially when considered the competition of ethereum, which has expanded from blockchains such as BNB Chain and Solana to networks adapted for specific challenges. The examples include hyperlichids, focused on synthetic assets and perpetual trade, and Berachain, which is apparently better suitable for assets are in cross -liquidity groups.
Related: Timeline: The gelatin token becomes sour after an exploit of $ 6 million in hyperliquid
The success of certain decentralized applications (DAPP) could serve as the final blow to the ether. For example, Ethena, the synthetic dollar protocol in ethereum, is making the transition to its own layer block chain 1. The project, which currently owns $ 5.3 billion in total value blocked (TVL), raised $ 100 million in December 2024 to support this change.
However, it may be premature to affirm that eth Price will continue to fall, since an important protocol update is just a few weeks away. Investors must carefully trace the practical benefits of ethereum's Pectra update, particularly in terms of base layer rates and general usability for the average user. Until then, the possibilities that eth exceeds the entertainment market is still thin.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The points of view, the thoughts and opinions expressed here are alone of the author and do not necessarily reflect or represent the opinions and opinions of Cointelegraph.
