This correction led to over $114 million in liquidations of leveraged ETH futures and caused the premium relative to the regular spot market to drop to its lowest level in over a year. Some traders have said that the rock-bottom ETH futures premium is a bottom signal, but let’s dig deeper into the data to see if this perspective makes any sense. ETH 1-month futures premium relative to spot markets.Source: Laevitas.chEther’s monthly futures typically trade above the regular spot price as sellers demand compensation for the longer settlement period.
Ether 1-month options 25% delta skew (put-call).Source: Laevitas.chCurrently, at 7%, the ETH options’ 25% delta skew suggests a lack of conviction among professional traders, raising the likelihood of further bearish momentum. From a derivatives market perspective, there is little indication that the recent ETH price correction has bottomed out.
The current 2% ETH futures annualized premium suggests a lack of demand for leveraged longs (buys), but this measure is highly influenced by recent price movements.For example, on Oct.10, 2024, the ETH futures premium dropped to 2.6% after a 14% price correction in two weeks, but the indicator rose to 7% as ETH regained most of its losses.
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Author / Journalist: Cointelegraph by Marcel Pechman
The story "Ethereum futures premium hits 1+ year low — Is it time to buy the ETH bottom?" has 695 words across 32 sentences, which will take approximately 3 - 6 minutes for the average person to read.
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