Pro traders curb their enthusiasm until Ethereum confirms $3,400 as support

Pro traders curb their enthusiasm until Ethereum confirms $3,400 as support

Ether (ETH) price jumped 11% between March 26 and March 29 to reach $3,480, which is the highest level in 82 days. Currently, the price is down 9% year-to-date but does data support the belief that the altcoin has resumed its uptrend toward a new all-time high? 

Institutional investors seem excited that the CoinShares Digital Asset Fund Flows Weekly Report revealed on Tuesday that the exchange-listed crypto products inflows reached the highest level in three months. Data showed that investment products for digital assets saw net deposits of $193 million last week.

Our top trading bots

At the same time, the Office of Science and Technology Policy, an executive office of the President of the United States, launched a study to offset energy use related to digital assets. Furthermore, on March 9, U.S. President Joe Biden signed an executive order directing various federal agencies to examine the implications of digital assets.

The Ethereum network's planned move to Proof-of-Stake consensus can also explain some of its outperformance versus Bitcoin. The transition has been postponed multiple times, although Q1, 2022 was mentioned on the official roadmap. By eliminating the burden of digital mining, Ethereum plans to become more efficient and allow cheaper and faster transactions.

Even with the anticipation of the PoS upgrade, the rally of the past 3 days is not enough to cause Ether pro traders to flip bullish according to derivatives metrics.

The Ether futures premium is neutral

To understand how larger-sized traders are positioned, one should look at Ether's futures and options market data. For instance, the basis indicator measures the difference between longer-term futures contracts and the current spot market levels.

The annualized premium of Ether futures should run between 5% and 10% to compensate traders for "locking in" the money for two to three months until the contract expires. Levels below 5% are bearish, while numbers above 10% indicate excessive demand from longs (buyers).

Pro traders curb their enthusiasm until Ethereum confirms $3,400 as support
Ether 3-month futures’ annualized premium. Source: Laevitas

The above chart shows that Ether's basis indicator recovered from 2% on March 13 to the current 6%. This level exceeds the 5% bear sentiment threshold but at the same time signals a weak demand for opening ETH futures longs.

Even though the metric points to a neutral-to-bearish sentiment, one must remember that Ether remains down 9% year-to-date and 28% below its $4,800 all-time high.

Options traders fear ETH could drop lower

The 25% options delta skew is extremely useful as it shows whether arbitrage desks and market makers are overcharging for upside or downside protection.

If option investors fear an Ether price crash, the skew indicator will move above 10%. On the other hand, generalized excitement reflects a negative 10% skew.

Related: Waiting on the executive order: how users and financial professionals may benefit from it

Pro traders curb their enthusiasm until Ethereum confirms $3,400 as support
Ether 30-day options 25% delta skew: Source: Laevitas

The skew indicator dropped below 10% on March 18, exiting the "fear" level as these options traders are no longer overcharging for downside protection. The current 7% level remains close to a bearish threshold.

Although there was a modest improvement in Ether's futures premium, the indicator remains neutral. Basically, ETH options markets are pricing a slightly higher risk for downside, so professional traders are not confident that the current $3,400 support will hold.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Keep reading upon Cointelegraph
Senator Ted Cruz invokes Canadian unrest to advocate for Bitcoin again
Senator Ted Cruz during his Conservative Political Action Conference (CPAC) speech on Friday advocated for Bitcoin (BTC) again while lauding its decentralization.Cruz...
Ethereum's average and median transaction fee slip, lowest in six months
The infamous transaction fees of the Ethereum (ETH) ecosystem underwent a decremental phase from Jan. 10 to record the lowest average and median fees of...
Meta unveils Metaverse AI supercomputer, claims it will be world’s fastest
Facebook’s parent company Meta says that its newly-created artificial intelligence (AI) “Research SuperCluster” (RSC) will “pave the way” towards building...
Binance Labs backs $200M Oasis Ecosystem Fund
Binance Labs, the venture capital (VC) arm of the Binance cryptocurrency exchange, announced Tuesday that it will contribute to Oasis Foundation’s $200...
Wall Street still not convinced on Bitcoin $100K this year: JPMorgan survey
One of the world’s largest investment banks has its Bitcoin (BTC) price predictions ready for 2022. In a recent poll, JPMorgan Chase asked its clients,...
Nifty News: The Red Ape Family show, Mini Royale on Solana and The Weeknd’s NFT collection
Catch up on nonfungible token (NFT)-related news this week as Cointelegraph rounds up the stories you don't want to miss. Bored Apes gets cast in an TV...
Kazakhstan expects at least $1.5B in economic activity from crypto mining within 5 years
A report from the Data Center Industry & Blockchain Association of Kazakhstan, or NABDC, estimates that cryptocurrency mining could bring $1.5 billion in...
Takeaways: 5 years after The DAO crisis and Ethereum hard fork
A vulnerability of a smart contract in one private DAO fund firstly to the leak of cryptocurrency worth tens of millions of dollars (billions as of today)...
1inch to launch dollar-pegged stablecoin with ICHI
Decentralized exchange aggregator 1inch has partnered with the ICHI platform to issue a new stablecoin pegged to the U.S. dollar.In a Thursday announcement,...
How much intrigue is behind Kusama’s parachain auctions?
Eleven projects joined the race when Kusama parachain auctions started on June 15. A few more got in during the latter auctions of the first batch. With...
PayPal, Salesforce contribute to TRM Labs’ $14M investment round
Blockchain intelligence platform TRM Labs has secured $14 million in Series A funding from venture funds across the crypto and technology sectors, sending...
US FDIC seeks insight on banks’ role in cryptocurrency markets
The United States Federal Deposit Insurance Corporation is looking for information and public comments on banks' cryptocurrency-related activities.The FDIC...
Putin Approved Russians to Help Venezuela Launch Petro Behind the US Back: Report
The launch of Venezuela’s state cyber coin petro might not have been as innocent as the country’s socialist government portrayed it. Reportedly, the development...
Google to Ban Crypto Ads in A Few Months
The tech titan Google is taking a hardline stance on advertisements which promote cryptos and its brethren. The restrictions are to take place already...
Slow-Speed Transactions Have Gone To Past With Bankex Solution
People are spending millions ETH for Cryptokitties, like crazy. We know, you have already bought one, and we also know you become outraged because of the...