Crypto News- Ethereum Prices Soar: Ethereum (ETH) experienced a noteworthy surge, rallying by 8% on November 9th and breaking through the $2,000 barrier. This upward momentum marked the highest price level in six months for the cryptocurrency. The catalyst behind this surge was the revelation that BlackRock had registered the iShares Ethereum Trust in Delaware. The news, initially shared by @SummersThings on a social network, was later confirmed by Bloomberg ETF analysts. The speculation surrounding a potential Ether spot ETF filing by BlackRock, a giant in the asset management industry with $9 trillion in assets, fueled optimistic expectations.
Ethereum Prices Soar to 6-Month High Amid BlackRock Spot ETF Speculation, but Retail Demand Remains Elusive
The surge triggered substantial liquidations in ETH short futures, amounting to $48 million. Notably, this follows BlackRock’s registry of the iShares Bitcoin Trust in Delaware in June 2023, a precursor to their initial spot Bitcoin ETF application a week later. Despite the absence of an official statement from BlackRock, investors displayed enthusiasm, propelled by the substantial influence the asset manager wields in traditional finance.
Professional traders responded to the rally by placing bullish bets using derivatives. Analysis of ETH derivatives metrics revealed a notable shift. Typically, Ether monthly futures trade at a 5%–10% annualized premium compared to spot markets. The Ether futures premium, surging to 9.5% on November 9th, reached the highest level in over a year, breaking above the 5% neutral threshold on October 31st. This shift marked the end of a two-month bearish period and low demand for leveraged long positions.
Examining the Ether options markets provided further insights. The 25% delta skew, which tends to rise above 7% during anticipated Bitcoin price drops and dip below -7% during periods of excitement, shifted from neutral to bullish on October 31st. The current -13% skew, the lowest in over 12 months, indicated optimism without reaching excessive levels. This healthy level had been maintained for the past 9 days, signaling that Ether investors were anticipating continued bullish momentum.
Despite the optimism in professional trading circles, retail indicators painted a different picture. Google searches for phrases like “Buy Ethereum,” “Buy ETH,” and “Buy Bitcoin” remained stagnant over the past week. While retail traders often lag behind in bull runs, the lack of increased interest is notable. Additionally, stablecoin premiums, used as a gauge for Chinese crypto retail trader activity, indicated dormant demand for cryptocurrencies.
The stablecoin premium, measuring the difference between China-based peer-to-peer USD Tether (USDT) trades and the United States dollar, currently stands at 100.9% on OKX, suggesting balanced demand from retail investors. This level contrasts with the 102% observed on October 13th before the crypto total market capitalization jumped 30.6% until November 9th. The data indicates that Chinese investors have not shown excessive demand for fiat-to-crypto conversion using stablecoins.
In summary, the recent surge in Ethereum’s value, propelling it above the $2,000 mark, can be attributed primarily to the dynamics within derivatives markets and the heightened anticipation surrounding the potential approval of a spot ETF. The absence of substantial retail demand, as evidenced by stagnant Google search trends and stablecoin premiums, may not be an immediate precursor to an impending correction. However, apprehensions emerge in light of the fervor generated by BlackRock’s Ethereum Trust registry and the notable prevalence of excessive leverage long positions in Ethereum derivatives. These factors collectively pose a challenge to the stability of the crucial $2,000 support level.
Delving into the driving forces behind Ethereum’s recent price rally, the derivatives market has played a pivotal role. Professional traders, responding to the unexpected 8% surge on November 9th, have strategically placed bullish bets using derivatives. The Ether futures premium, reaching 9.5% on that day, marked its highest level in over a year. This substantial increase surpassed the 5% neutral threshold on October 31st, terminating a two-month bearish period characterized by low demand for leveraged long positions. These shifts underscore the significant impact of derivatives activity on Ethereum’s recent price trajectory.
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