Fun

Ethereum's derivatives show strength despite 10% ETH price drop

News Feed - 2024-03-16 03:03:00

Marcel Pechman5 hours agoEthereum"s derivatives show strength despite 10% ETH price dropEther futures and options reflect pro traders" confidence in the bull run.1630 Total views65 Total sharesListen to article 0:00Market AnalysisOwn this piece of crypto historyCollect this article as NFTJoin us on social networksEther (ETH) plunged 10% to $3,567 on March 15, marking its lowest point in over a week. This downturn triggered $126 million in forced liquidations within ETH futures. Investors are now questioning whether this signals a shift away from the recent bullish trend and pondering the likelihood of revisiting the $4,090 level observed on March 12. The key to this question may lie in the demand for Ether derivatives.Traditional financial assets also experienced sell pressure 


Ether"s decline on March 15 mirrored the drops seen in Bitcoin (BTC) and the wider cryptocurrency market, showing no particular underperformance compared to the overall sector. In a similar vein, the S&P 500 index dropped by 1.1% after almost hitting a new all-time high of 5,257 on March 14. Nonetheless, this doesn"t necessarily indicate a corresponding sentiment among ETH investors.


Some experts believe that the movement to take profits is not unique to the crypto markets, highlighted by the U.S. 2-year Treasury yield hitting 4.73% on March 15, its peak in over three months. A rise in yield on fixed incomes suggests selling pressure, as investors seek higher returns on these assets. Therefore, whether cryptocurrencies are viewed as risky investments or scarce alternatives, traders are moving towards cash for security.


The U.S. Federal Reserve (Fed) is set to determine the base interest rate at its next scheduled meeting on March 20. Investors are concerned that recent data on consumer inflation (CPI) and the producer price index, being slightly above expectations, might compel the Fed to maintain interest rates at 5.25% longer than initially thought. This prospect applies downward pressure on the economy and favors fixed-income investments.


Thierry Wizman, a global FX and rates strategist at Macquarie, stated, “I think the other issue here is not just the 2024 and 2025, its the other issues that the Fed is thinking about which includes that the market is too frothy.” As per CNBC, Wizman suggested this could indicate the Fed"s belief in the need for higher long-term interest rates.


Despite the current volatility and uncertainty in global economies, the fact that Ether has risen 57% year-to-date in 2024 should be seen as a strong vote of confidence. However, given the typically short-term outlook of crypto investors, it is crucial to examine the ETH futures and options markets to discern if the bullish momentum has waned following the recent 10% price drop.Ether derivatives show no signs of stress or trend change


Perpetual contracts, often referred to as inverse swaps, feature an embedded rate that is recalculated every eight hours. A positive funding rate signals a higher demand for leverage from traders holding long positions.Ether perpetual futures 8-hour % funding rate. Source: Laevitas.ch


The data shows that ETH funding rates have consistently been above 0.03% per eight-hour period, which translates to 0.6% weekly. Typically, when traders are overly optimistic about a bull market, these rates can surge above 2.1% per week. Thus, it’s clear that traders engaged in perpetual futures did not shift to a bearish stance amidst the March 15 correction.


To assess whether traders were taken by surprise and are now holding long positions at a loss, it"s crucial to analyze the balance between call (buy) and put (sell) options. An increase in the demand for put options usually suggests that traders are preparing for neutral to bearish price movements.ETH options put-to-call volume ratio at Deribit. Source: Laevitas.ch


Over the last 10 days, the demand for Ether call options has outpaced that for protective puts by an average margin of 60%. This ratio could be considered neutral, especially since crypto traders tend to lean toward bullish positions. Therefore, there’s no indication that the Ether derivatives market suffered significantly as the ETH price momentarily dropped by 10% on March 15. Based on the current state of Ether futures and options, the bull market appears to be unshaken, with indicators pointing towards continued health.


This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Federal Reserve# Ethereum# Stocks# Leverage# Futures# Ether PriceAdd reactionAdd reactionRead moreMozaic Finance hacked for $2.4M via private key compromisePrice analysis 3/15: BTC, ETH, BNB, SOL, XRP, ADA, DOGE, AVAX, SHIB, DOTDeFi TVL breaches $100B, MakerDAO readies DAI ‘Endgame:’ Finance Redefined

News Feed

Tokenized Bitcoin on Ethereum Crosses $11 Billion Notional, WBTC Commands 76% of Circulating Supply
Tokenized Bitcoin on Ethereum Crosses $11 Billion Notional, WBTC Commands 76% of Circulating Supply According to data on August 7, there’s 253,510 bitcoin-
PRIMEZTOKEN Is Now Available for Trading on LBank Exchange
PRIMEZTOKEN Is Now Available for Trading on LBank Exchange press release PRESS RELEASE. INTERNET CITY, DUBAI, Sep. 23, 2022 – LBank Exchange, a global digital asset trading p
Bitcoin is hedge against ‘horrible’ gov’t fiscal policy — Cathie Wood
William Suberg9 hours agoBitcoin is hedge against ‘horrible’ gov’t fiscal policy — Cathie WoodBitcoin ETFs are not the only reason behind this year’s meteoric BTC price performance, Cathie Wood says.2324 Total
Research Shows Centralized Exchanges Saw the Most Visits This Year From Americans, Koreans, Russians
Research Shows Centralized Exchanges Saw the Most Visits This Year From Americans, Koreans, Russians Residents of the United States, South Korea and the Russian Federation have bee
Bitcoin To Hit $125,000 By Year-End If Trump Wins, Says Standard Chartered
Este artículo también está disponible en español. In a research paper dated October 24, Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered Bank,
SEC’s Court Hearing on Telegram Token Delayed Till Next Year
Telegram will have to wait to make its case to the U.S. Securities and Exchange Commission (SEC) that its “gram” token is not a security. According to the latest court f
Munchables hacker returns $62.8M Ether without ransom
Arijit Sarkar1 hour agoMunchables hacker returns $62.8M Ether without ransomOn March 27, 4:40 am UTC, Munchables identified the hacker as one of its developers. An hour of negotiations led to the former developer agreein
UAE Says No Virtual Asset Service Provider Has Been Granted an Operating Permit
UAE Says No Virtual Asset Service Provider Has Been Granted an Operating Permit The United Arab Emirates virtual assets regulator has said no crypto entity has been granted the ful
Joe Biden: US Bringing 30 Countries Together to Stop ‘Illicit Use of Cryptocurrency’
Joe Biden: US Bringing 30 Countries Together to Stop "Illicit Use of Cryptocurrency" President Joe Biden says that the U.S. will bring together 30 countries to stop “the ill
Fed Chair Powell: We’re Not Seeing Significant Macroeconomic Implications From Crypto Sell-Off
Fed Chair Powell: We"re Not Seeing Significant Macroeconomic Implications From Crypto Sell-Off Federal Reserve Chairman Jerome Powell says the central bank is “not really se
Copy Trading Platform ZuluTrade Powers SetBroker.com
Copy Trading Platform ZuluTrade Powers SetBroker.com SetBroker, an innovative Bitcoin-based copy-trading platform, announced today their successful launch. Their platform is powe
Russian Regulators Find Common Ground — Bitcoin Can’t Be Used for Payments
Russian Regulators Find Common Ground — Bitcoin Can’t Be Used for Payments Russian authorities are yet to reach full consensus on the future of cryptocurrencies but government