Ether Futures Premiums Make Par With Bitcoin, Reflecting Positive Market Shift: 'The Bearish Stance On ETH Is Gone'

In a first since August, Ether futures premiums are matching Bitcoin futures on the Chicago Mercantile Exchange (CME). This suggests a significant shift in the crypto market sentiment, according to analysts.

According to The Block report, K33 Research Senior Analyst Vetle Lunde and Vice President Anders Helseth, this development indicates that the negative outlook on Ethereum ETH/USD has faded. As a result, traders are less likely to hedge Bitcoin BTC/USD exposure with Ether, especially with the ETHBTC ratio hitting July 2022 lows. This could lead to Ether regaining ground relative to Bitcoin, they added.

“The bearish stance on ETH is gone,” the analysts stated.

Further, the derivatives markets are reflecting a more optimistic outlook following Bitcoin’s latest 4% price rally, Lunde and Helseth noted. Traders on the CME have exhibited strong faith in Bitcoin, maintaining record-high exposure and double-digit futures premiums, indicating robust institutional demand and an optimistic outlook for November.

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The offshore perpetual markets are also shifting from a bearish to a neutral stance. As Bitcoin trades back at annual highs, the tendency to short-sell has declined, while the propensity to go long has increased, the analysts highlighted.

Options traders are also keeping a bullish stance, resonating with the broader derivatives sentiment, the K33 Research analysts said. The surge in implied volatility following recent price movements suggests that volatility strategies in options trading have become more expensive.

However, despite these developments in the derivatives market, there is no strong evidence of a consistent rise in spot volumes. The market continues to respond dynamically to price movements, with volumes peaking during active trading periods and then settling back, the analysts noted.

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Bitcoin and Ethereum Photo by Marisha on Shutterstock