Ether Surges 8% After BlackRock News
On November 9, Ether (ETH) experienced an unexpected 8% rally, breaking through the $2,000 mark and reaching its highest price level in six months. This surge was triggered by the news of BlackRock registering the iShares Ethereum Trust in Delaware. The initial announcement was made on a social network by @SummersThings and later confirmed by Bloomberg ETF analysts.
The iShares Ethereum Trust has just been registered in Delaware.
For context, BlackRock’s iShares Bitcoin Trust was registered in a similar manner 7 days before they filed the ETF application with the SEC. Details below.
[announcement: I’m moving to @SynopticCom soon] pic.twitter.com/IYafIaxMzA— Summers (@SummersThings) November 9, 2023
This news led to optimistic expectations about a potential Ether spot ETF filing by BlackRock, a $9 trillion asset manager. However, without an official statement from BlackRock, investors may have jumped the gun. Nevertheless, given the asset manager’s significant influence in traditional finance, those betting against Ether’s success are in a precarious position.
Professional Traders’ Bullish ETH Bets
To understand how professional traders are positioned after the surprise rally, one should analyze the ETH derivatives metrics. Normally, Ether monthly futures trade at a 5%–10% annualized premium compared to spot markets. The Ether futures premium jumped to 9.5% on Nov. 9, marking the highest level in over a year and breaking above the 5% neutral threshold on Oct. 31.
The Ether options 25% delta skew shifted from neutral to bullish on Oct. 31, and the current -13% skew is the lowest in over 12 months but far from being overly optimistic. Such a healthy level has been the norm for the past nine days, indicating that Ether investors anticipated bullish momentum.
Retail Indicators Point to Dormant Demand for ETH and Cryptocurrencies
Google searches for “Buy Ethereum,” “Buy ETH,” and “Buy Bitcoin” have been stagnant for the past week. There has also been declining demand for cryptocurrencies when using stablecoins premium as a gauge for Chinese crypto retail trader activity.
The Tether premium on OKX stands at 100.9%, indicating balanced demand from retail investors and showing that Chinese investors are yet to present excessive demand for fiat-to-crypto conversion using stablecoins.
Hot Take: Ether’s Rally Driven By Derivatives Markets and Expectations of Spot ETF Approval
Ether’s rally above $2,000 seems to have been driven by derivatives markets and the expectation of a spot ETF approval. The lack of retail demand is not necessarily an indicator of impending correction; however, concerns arise due to excessive leverage longs in ETH derivatives potentially putting the $2,000 support level to the test.
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