Although the price of Ethereum has risen to $ 4,200, derivatives market data show that upward sentiment in futures markets and Ethereum options is declining.
to the the report The Coin Telegraph has been fantastic for Ethereum in recent weeks, and the digital currency has managed to rise 80 percent to a record high of $ 4,200. Even with a 7% correction in the price of Ethereum, the total growth of this digital currency, which is the number two digital currency in the market, has reached more than 300% since the beginning of 2021. Its market value is currently more than $ 450 billion.
Despite such astonishing growth, futures market data and options contracts, the index of fear and greed do not show excessive optimism in the market. These data have led some traders to question whether confidence in Ethereum and the prospect of its price rising in the future is declining.
The launch of the Ethereum CME futures platform, the issuance of digital bonds by the European Investment Bank, the Berlin Update, the Ethereum Improvement Plan 1559 (EIP1559) and its integration with expectations of lower network fees have made the current uptrend so powerful. .
In addition, bringing the total assets locked in decentralized applications to $ 90 billion and reducing the inventory of exchange offices has fueled increased demand for Ethereum and amplified Ethereum’s uptrend scenario.
The increase in Ethereum open futures to $ 10 billion is also a sign of the interest of professional traders in Ethereum. VanEck has filed a request to launch an exchange-traded fund (Ethereum ETF), which has a major impact on the bullish outlook.
Ethereum Premium Contracts
In order to confirm that investor confidence in Ethereum has declined as the price of this digital currency has reached its historic high, it is necessary to examine the difference in the value of futures contracts. Unlike non-maturity futures contracts with fixed maturities do not have a funding rate. At the same price, they are very different from the price of Ethereum in instant exchanges.
By calculating the difference between the price of futures contracts and the price of Ethereum in instant exchanges, traders can estimate how bullish the market is. Whenever buyers’ optimism is too high, quarterly futures contracts will be traded at a 20% or higher surcharge.
As can be seen in the chart above, the annual surplus is currently 23%, which is below average, and it is a long way from the 47% peak that occurred on April 13 (April 24). Ethereum prices were up 52 percent in three weeks at the time, approaching $ 2,400.
To measure the positives in the market after the historical peak of Ethereum of $ 4,200, you should also refer to the 25% skew delta. This index provides a reliable review of market fears and greed. The skewed delta compares buying contracts with selling.
Whenever the neutral to declining sell-off premium is greater than the similar buying option, the index enters the positive range. This condition is commonly referred to as the “fear” scenario. Negative skewness, on the other hand, means that the market is likely to be bullish.
As you can see in the chart above, this indicator is in the negative range of 10, which is considered the neutral to ascending range. The closer this index is to minus 20, the more greed dominates the market. This happened on Sunday, at the same time as the price of Ethereum reached its historic peak.
Both indices of the option markets are in the neutral to bullish range, which is considered abnormal after the stable and positive price performance; Therefore, it can be said that there is not too much excitement among professional traders.
Of course, it should not be forgotten that this is probably a half-full glass due to the opportunity to use shopping levers.
However, these data can be interpreted as saying that professional traders do not have much confidence in the market, and this can increase sellers’ hopes for price correction. Unfortunately, it is not yet possible to say with certainty what awaits Ethereum; Because there is no exact time to solve the problems of network fees of this digital currency.