The Ether Futures Market Signals Bearish Outlook Ahead of Ether Futures ETFs
The ether futures market on the Chicago Mercantile Exchange (CME) is currently in discount territory, indicating a bearish sentiment, according to K33 Research. The price of ether futures has been trading at a lower premium compared to bitcoin futures, with the gap widening recently. In addition, ether futures are now trading at a discount price compared to the spot market. The bearish sentiment is further amplified by below-average funding rates on perpetual contracts and options traders paying a premium for puts with shorter expiries.
Ether Favored Over Bitcoin for Exposure
In their previous report, K33 Research argued that September and October were favorable for more substantial exposure to ether than bitcoin. This is due to the expectation that the Securities and Exchange Commission (SEC) will approve futures-based ether ETF proposals. Ark Invest and 21Shares have also filed a joint application for a spot ether ETF. However, despite the anticipation of ether futures ETFs being approved in October, the current discount in ether futures is considered peculiar.
Bitcoin Shows Signs of Increased Volatility
While K33 Research remains bullish over the coming year with the potential approval of a spot bitcoin ETF, they note that recent bitcoin price action is indicating increased volatility ahead. The market is concerned about short-term selling pressure influenced partly by FTX’s bankruptcy estate. Despite this volatility, the analysts believe that it presents a good opportunity to accumulate bitcoin.
U.S. CPI Inflation Figures Released
Today, U.S. Consumer Price Index (CPI) inflation figures for August were released. The data showed that CPI rose 0.6% compared to July and 3.7% year-over-year, slightly higher than forecasted. Core CPI figures, which exclude food and energy costs, rose 0.3% compared to last month and came in line with forecasts at 4.3% year-over-year.
Hot Take: Bearish Outlook on Ether Futures Market Raises Questions
The current discount in the ether futures market on the CME is raising questions about the bearish outlook for ether ahead of expected ether futures ETFs. Despite the anticipation of SEC approval for ether futures ETFs in October, the discount in ether futures is considered peculiar. The widening gap between ether and bitcoin futures, combined with other bearish indicators, suggests caution in the market. However, the potential approval of a spot bitcoin ETF presents a bullish outlook for bitcoin. Overall, the crypto market remains dynamic and volatile, offering both opportunities and risks for investors.
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