The price of Ether fell by 9.3% between March 26 and March 28, testing the $1,860 level for the first time in two weeks. This led to over $114 million in futures liquidations and a drop in the premium to its lowest level in over a year.
Ether Futures Premium Decline
Ether's monthly futures typically trade above the spot price as sellers demand compensation for the longer settlement period. Recently, however, the premium fell to 2%, indicating a lack of demand for leveraged buys.
Reaction from Whales and Professional Traders
The 25% delta skew metric for Ether options, at 7%, suggests low confidence among traders, indicating possible further declines. Analysts attribute this to reduced activity in the Ethereum network and a shift towards layer-2 scalability.
Competition for the Ethereum Network
Competition from new blockchains like Hyperliquid and Berachain is impacting Ethereum. For instance, the Ethena synthetic dollar protocol is moving to its own blockchain, reducing demand for Ethereum.
A significant protocol update is expected on Ethereum soon, which may affect its competitiveness and attract investors. However, the likelihood of Ether outperforming the altcoin market remains slim for now.
