In an unexpected turn of events on November 9, Ether experienced an impressive 8% rally, breaking the $2,000 barrier and reaching its highest price level in six months. The catalyst behind this surge was the news of BlackRock registering the iShares Ethereum Trust in Delaware. The announcement, initially made by @SummersThings on a social network, was later confirmed by Bloomberg ETF analysts.
This development triggered a wave of optimism in the market, with expectations rising for a potential Ether spot ETF filing by BlackRock, a colossal $9 trillion asset manager. This speculation comes in the wake of BlackRock’s iShares Bitcoin Trust registry in Delaware in June 2023, a week before their initial spot Bitcoin ETF application. However, the absence of an official statement from BlackRock raises questions about whether investors may have prematurely embraced the bullish narrative. Nevertheless, the sheer influence of the asset manager in traditional finance leaves those betting against Ether’s success in a precarious position.
The surge led to $48 million worth of liquidations in ETH short futures, indicating a shift in market sentiment. To understand how professional traders are positioned post-rally, analysis of ETH derivatives metrics becomes crucial. Typically, Ether monthly futures trade at a 5%–10% annualized premium compared to spot markets. The Ether futures premium, jumping to 9.5% on Nov. 9, marked the highest level in over a year, ending a two-month bearish period and low demand for leveraged long positions.
Examining Ether options markets provides further insights. The 25% delta skew, shifting from neutral to bullish on Oct. 31, currently stands at -13%, the lowest in over 12 months but not overly optimistic. This healthy level has been consistent for the past 9 days, suggesting that Ether investors anticipated the bullish momentum.
Despite the speculative ETF narrative, Ether bulls seemed to dominate, with a 24% rally between Oct. 18 and Nov. 8. This surge reflects increased demand for the Ethereum network, as evidenced by the top decentralized applications’ 30-day volumes.
However, when assessing the broader cryptocurrency market structure, especially retail indicators, there appears to be some inconsistency with the surging optimism and demand for leverage using Ether derivatives. Caution may be warranted as the market navigates the dynamics of this unexpected rally.
