The price of ether (ETH) dropped by 9.3% between March 26 and March 28, testing the level of $ 1,860 for the first time in two weeks. This correction has led to more than $ 114 million in liquidations of term contracts on the effects of ETH and caused the premium to fall compared to the market at the regular point at its lowest level in more than a year.
Some merchants have said that ETH Future Premium Rock-Bottom is a lower signal, but let’s deepen the data to see if this perspective has a meaning.
ETH 1 month before premium compared to cash markets. Source: laevitas.ch
Ether’s monthly term contracts are generally negotiated above the regular price, as sellers require compensation for the longer payment period. An annualized bonus of 5% to 10% generally indicates neutral markets, reflecting the cost of opportunities and the risk of trade. However, the term contracts on the ETH fell below this threshold on March 8, following a price correction of 24% in the previous two weeks.
The long -term annualized premium of 2% of 2% suggests a lack of demand for long leverages (purchases), but this measure is strongly influenced by recent price movements. For example, on October 10, 2024, the ETH’s term premium fell to 2.6% after a price correction of 14% in two weeks, but the indicator went to 7% while the ETH found most of its losses. Essentially, the term premium rarely signals changes in the cash price trend.
ETH whales are afraid that the price of ether will fall more
To determine if the whales have lost any interest in ether, it is crucial to observe the way the market is price options (sell) compared to call options (purchase). When traders anticipate a downward trend, metric of 25% Delta exceeded 6%, indicating a higher demand for coverage strategies. On the other hand, the increase periods generally push the bias less than -6%.
One-month ether options 25% Delta Skew (put-edge). Source: laevitas.ch
Currently, at 7%, the Delta Skew of 25% of ETH options suggests a lack of conviction among professional traders, increasing the probability of a downward dynamic.
From the point of view of the derivative market, there is little indication that the recent correction of the price of the ETH has been in the lead. Essentially, investors are not convinced that the support of $ 1,800 will hold.
Some analysts argue that the sharp drop in the activity of the Ethereum network is the main reason for the reduced attraction of the ETH, while others suggest that the change towards the scalability of layer 2 has considerably reduced the potential of basic chain costs. Given the need to compensate for the validators of the network, the lack of ignition of capital requires greater emission of ETH, which negatively affects the net yields of the features of the natives.
The Ethereum network faces abrupt competition
Trying to determine the reasons for the motivations of the sellers is futile, especially when we consider the competition of Ethereum, which has extended from blockchains like the BNB and Solana channel to networks adapted to specific challenges. The examples include hyperliquid, focused on synthetic assets and perpetual trading, and Berachain, which is apparently better suited to active ingredients dotted in cross pools.
In relation: Chronology: Jelly Token becomes sour after $ 6 million exploiting on hyperliquid
The success of certain decentralized applications (DAPP) could serve as a final blow for ether. For example, Ethena, the protocol of the synthetic dollar on Ethereum, is moving to its own layer 1 Blockchain. The project, which currently holds $ 5.3 billion in total locked value (TVL), raised $ 100 million in December 2024 to support this change.
However, it may be premature to claim that Eth Price will continue to decrease, because an update of the major protocol is only a few weeks old. Investors must carefully follow the practical advantages of Ethereum Pectra upgrade, in particular in terms of basic layer costs and overall user -user for the average user. Until then, the chances of surpassing the wider Altcoin market remain thin.
This article is for general information purposes and is not intended to be and must not be considered as legal or investment advice. The points of view, the thoughts and opinions expressed here are the only of the author and do not reflect or do not necessarily represent the opinions and opinions of Cointellegraph.
