New statistics show that futures traders are optimistic about the future of Ethereum prices in the short term and expect the price of this digital currency to reach $ 2,500.
to the Report Coin Telegraph, the price of Ethereum recently managed to record a new historical high by breaking the $ 2,000 barrier. This gave traders a more bullish view of the digital currency’s performance in the short term.
Some experts believe that Visa’s recent use of the USDC StableCoin, which runs on the Ethereum network, has sparked a recent spark. Others consider the triangle pattern to be the main reason for the increase in the price of this digital currency.
Regardless of the reason behind the 25% increase in Ethereum prices, it seems that professional traders have taken an upward view of the Ethereum price trend during this period. This view can be confirmed by looking at the criteria of futures markets and reaching their historical peaks.
This optimism can challenge traders who have used high leverage in their trading and lead to cascading liquidations in exchanges. However, professional traders are confident in their approach; This can be confirmed by the skew delta index.
It is also possible that investors have considered the implementation of Ethereum Improvement Plan 1559 (EIP1559). The plan is supposed to solve the problem of a sharp increase in network fees. With the implementation of this improvement plan, Ethereum fees are calculated on a fixed model; It is said that after this plan, the scalability of the network will more than double.
Calculating and examining the value of futures contracts (premiums) is one of the ways that the traders’ approach can be understood. Premium measures price differences in futures contracts and instant markets.
As a rule, futures contracts have a value of 10 and 20 percent more than the stable coin lending rate. By postponing the settlement date of the contract, the seller is looking to sell at a higher price, which increases the premium.
Ethereum’s futures premium is at 38%, while Ethereum has reached a new high; That is, leveraged futures contracts are leveraged for risky investors. A premium above 20% is not necessarily a sign of an imminent fall, but overconfident investors may be at risk if prices fall below $ 1,750.
It is worth noting that traders sometimes increase their leverage in market jumps, but then buy Ethereum to reduce the risk of futures contracts.
High-leverage long-term contracts are sometimes bought by small traders as a result of a sharp increase in the purchase of futures contracts. Whales, arbitrage tables, and market makers refuse to invest in such contracts because of variable financing rates.
Upward status of discretionary contracts
Examining the market situation of option contracts is necessary to correctly interpret the behavior of professional traders and the risks arising from market fluctuations.
The 25% skew delta study is a reliable and instantaneous tool for analyzing the fear and greed in the market. This index examines similar buying and selling (pot) contracts similarly. This indicator enters the negative range when the premium of neutral to bearish sell options is greater than the same buy options. In this case, it is said that the market has entered a phase of “fear”. This condition usually occurs after extensive mutations. On the other hand, when the skewness is negative, it can be said that the prevailing market approach is more upward.
For the first time since February 5 (February 6), the skewness of option contracts has entered the ascending zone. One hundred, of course, is not far from minus 10%, which is a neutral area. It should not be assumed that the fear and greed index has improved in recent weeks.
One reason for the relatively uptrend is the fear of a sharp drop in price after overcoming the $ 2,000 psychological resistance; What we witnessed on February 19 (March 1).
Despite all this, derivatives markets are in a healthy position, and it seems that professional traders are adjusting their positions as Ethereum marks a new historical peak.