Ethereum Futures Shift Hints at 30% “Airdrop Rally” Ahead of Merger
The backwardation reflects a market condition in which spot prices are trading higher than future prices.
Market analysis
Bullish Ether (ETH) likes a positive spread between its spot price and ETH futures prices, as the so-called contango reflects optimism for a higher rate in the future. But since August 1, the Ethereum futures curve has been sliding in the opposite direction.
Ethereum forward quarterly futures contractsOn the daily chart, quarterly Ethereum futures contracts, which were set to expire in December 2022, slipped in backwardation, a condition opposite to contango, in which the futures price becomes lower than the spot price.
The spread between the Ethereum spot and futures price fell to minus $8 on August 1.
ETH230-ETHUSD daily price chart. Source: TradingViewOn the one hand, the current spot price of ETH above its year-end outlook appears as a bearish sign. However, the conditions surrounding the current negative spread between the Ether spot price and the futures price suggest that traders may actually be bullish on ETH.
For example, Bitcoin (BTC) has gained 15% since its futures contracts went into reverse at the end of June for the first time in a year.
ETH may rally on 'airdrop' hopesAdditionally, a potential chain split will likely be bullish ahead of the merger in September, some analysts say.
Roshun Patel, former VP of Institutional Lending at Genesis Trading, noted that December Ether futures traded back due to Ethereum's "fork odds," which could prompt traders to buy ETH spot before the merger.
In the meantime,...
The backwardation reflects a market condition in which spot prices are trading higher than future prices.
Market analysis
Bullish Ether (ETH) likes a positive spread between its spot price and ETH futures prices, as the so-called contango reflects optimism for a higher rate in the future. But since August 1, the Ethereum futures curve has been sliding in the opposite direction.
Ethereum forward quarterly futures contractsOn the daily chart, quarterly Ethereum futures contracts, which were set to expire in December 2022, slipped in backwardation, a condition opposite to contango, in which the futures price becomes lower than the spot price.
The spread between the Ethereum spot and futures price fell to minus $8 on August 1.
ETH230-ETHUSD daily price chart. Source: TradingViewOn the one hand, the current spot price of ETH above its year-end outlook appears as a bearish sign. However, the conditions surrounding the current negative spread between the Ether spot price and the futures price suggest that traders may actually be bullish on ETH.
For example, Bitcoin (BTC) has gained 15% since its futures contracts went into reverse at the end of June for the first time in a year.
ETH may rally on 'airdrop' hopesAdditionally, a potential chain split will likely be bullish ahead of the merger in September, some analysts say.
Roshun Patel, former VP of Institutional Lending at Genesis Trading, noted that December Ether futures traded back due to Ethereum's "fork odds," which could prompt traders to buy ETH spot before the merger.
In the meantime,...
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