Ether (ETH) price fell 9.3% between March 26 and March 28, testing the $1,860 level for the first time in two weeks. This correction led to over $114 million in liquidations of leveraged ETH futures and caused the premium relative to the regular spot market to drop to its lowest level in over a year.
Some traders have said that the rock-bottom ETH futures premium is a bottom signal, but let’s dig deeper into the data to see if this perspective makes any sense.
ETH 1-month futures premium relative to spot markets. Source: Laevitas.ch
Ether’s monthly futures typically trade above the regular spot price as sellers demand compensation for the longer settlement period. A 5% to 10% annualized premium usually indicates neutral markets, reflecting the cost of opportunity and the exchanges’ risk. However, ETH futures dropped below this threshold on March 8, following a 24% price correction in