Ether (ETH) price jumped 11% between March 26 and March 29 to reach $3,480, which is the highest level in 82 days. Currently, the price is down 9% year-to-date but does data support the belief that the altcoin has resumed its uptrend toward a new all-time high?
Institutional investors seem excited that the CoinShares Digital Asset Fund Flows Weekly Report revealed on Tuesday that the exchange-listed crypto products inflows reached the highest level in three months. Data showed that investment products for digital assets saw net deposits of $193 million last week.
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At the same time, the Office of Science and Technology Policy, an executive office of the President of the United States, launched a study to offset energy use related to digital assets. Furthermore, on March 9, U.S. President Joe Biden signed an executive order directing various federal agencies to examine the implications of digital assets.
The Ethereum network’s planned move to Proof-of-Stake consensus can also explain some of its outperformance versus Bitcoin. The transition has been postponed multiple times, although Q1, 2022 was mentioned on the official roadmap. By eliminating the burden of digital mining, Ethereum plans to become more efficient and allow cheaper and faster transactions.
Even with the anticipation of the PoS upgrade, the rally of the past 3 days is not enough to cause Ether pro traders to flip bullish according to derivatives metrics.
The Ether futures premium is neutral
To understand how larger-sized traders are positioned, one should look at Ether’s futures and options market data. For instance, the basis indicator measures the difference between longer-term futures contracts and the current spot market levels.
The annualized premium of Ether futures should run between 5% and 10% to compensate traders for "locking in" the money for two to three months until the contract expires. Levels below 5% are bearish, while numbers above 10% indicate excessive demand from longs (buyers).