Originally published on: December 09, 2024
Ether took a hit on Dec. 9, slipping to the $3,800 mark after failing to surpass the resistant $4,050 level that has held strong since December 2021. With a 5% drop in price, concerns are rising among traders about the sustainability of the bull run, especially as Bitcoin remains near $100,000.
Despite record-high inflows into Ether exchange-traded funds (ETFs), the failure to breach the long-standing resistance level has left investors uneasy. However, professional traders seem unaffected, as Ether futures data shows no signs of anticipating further corrections.
The current annualized premium for Ether futures sits at 17%, suggesting a high demand for ETH leverage driven possibly by arbitrage opportunities in perpetual contracts. This increased appetite for leveraged positions is reflected in the funding rates for perpetual futures.
Retail traders typically shy away from monthly futures due to price detachment from spot ETH markets, but heightened leverage demand can influence monthly futures pricing as large players monitor arbitrage opportunities closely.
Despite ETH’s recent price correction and the struggle to break through $4,050, the options market has shown resilience, with the skew remaining neutral at -2%. A shift toward bearish sentiment would be indicated by a skew above the 6% neutral threshold.
The recent decline in Ether’s price seems to be more influenced by macroeconomic concerns than crypto-specific factors. Global economic worries that could impact cryptocurrency markets likely played a role in the dip. However, derivatives market indicators still reflect a sense of optimism among traders.
Overall, while the market may be experiencing some turbulence, the outlook for Ether remains optimistic. Stay tuned for more insights and updates on cryptocurrency trends to refine your trading strategies and spot investment opportunities.
