Ethereum price hits 6-month high amid BlackRock spot ETF buzz, but where’s the retail interest?

Ether (ETH) experienced an impressive 8% rally on November 9, breaking the $2,000 barrier and reaching its highest price level in six months. The surge, sparked by BlackRock news of the listing of the iShares Ethereum trust in Delaware, resulted in $48 million worth of ETH liquidity in a short period of time. The first announcement was made on the social network @SummersThings, later confirmed by Bloomberg ETF analysts.

The iShares Ethereum Trust is now registered in Delaware.

For context, BlackRock's iShares Bitcoin Trust similarly filed 7 days before filing its ETF application with the SEC. Details below.

[announcement: I’m moving to @SynopticCom soon] pic.twitter.com/IYafIaxMzA

— Summers (@SummersThings) November 9, 2023

The news fueled optimism about the Ether spot ETF filing by BlackRock, the $9 trillion asset manager. This estimate is based on BlackRock's iShares Bitcoin Trust filing in Delaware in June 2023, a week before their first Bitcoin ETF application. However, with no official announcement from BlackRock, investors may have jumped the gun, although the asset manager's significant influence in traditional finance leaves those who oppose Ether's success in a difficult position.

Professional traders have placed high ETH bets using derivatives

After the spectacular rally, professional traders should analyze the ETH derivative parameters to understand how they are positioned. Typically, Ether monthly futures trade at a 5%–10% annual premium to the spot markets, indicating that sellers demand more money to extend settlement.

Ether's futures premium, jumping to 9.5% on November 9, hit its highest level in more than a year and broke above the 5% neutral threshold on October 31. This change eliminated the two-month carry-over period and lower demand for use. Positions.

To assess whether the break above $2,000 is overly optimistic, traders should examine the Ether options markets. When traders anticipate a fall in the price of Bitcoin, the delta 25% skew rises above 7%, while bullish periods fall below negative 7%.

Ether Options' 25% delta skew turned neutral as of October 31, and the current -13% skew is the lowest in more than 12 months, but far from overly optimistic. Such a healthy level has been common for the past 9 days, which means that Ether investors have been waiting for the bullish momentum.

ETH rose 24% before the BlackRock news, between October 18th and November 8th, this price action reflects strong demand for the Ethereum network, although there is no doubt that Ether bulls will prevail regardless of the ETF narrative of the space. 30-day volumes of advanced decentralized applications (DApps).

Still, when analyzing the structure of the broader cryptocurrency market, especially retail indicators, there is some inconsistency with the ever-increasing optimism and interest in using ether derivatives.

RELATED: Bitcoin ETF Launch May Be Delayed By More Than A Month After SEC Approval

Retail indicators indicate demand for ETH and cryptocurrencies

For starters, Google searches for “Buy Ethereum”, “Buy ETH” and “Buy Bitcoin” have been stagnant for the past week.

One might argue that retail traders typically delay the bull run, often entering the cycle a few days or weeks after major price signals and 6-month highs are hit. However, demand for cryptocurrencies has been declining when using stablecoins premium as a benchmark for Chinese crypto-retailer activity.

The stablecoin premium measures the difference between China-based peer-to-peer USD Tether (USDT) trading and the United States dollar. Overbought demand tends to push the indicator 100% above its fair value, and during bullish markets, the Tether market is flooded with supply, resulting in 2% or more declines.

Currently, the Tether premium on OKX stands at 100.9%, which indicates a balanced demand from retail investors. Such a level contrasts with 102% on October 13, for example, before the crypto's total market capitalization jumped 30.6% through November 9. This shows that Chinese investors have yet to show excessive demand for fiat-to-fiat. Crypto exchange using stablecoins.

Essentially, Ether's rally above $2,000 appears to have been driven by commodity markets and anticipation of spot ETF approval. A lack of retail demand is not necessarily an indication of an impending correction. However, the hype around BlackRock's Ethereum Trust listing, coupled with excessive leverage in ETH derivatives, raises concerns, putting the $2,000 support level under test.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.