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Ether (ETH) fell 11.9% from November 20th to November 22nd, bottoming out at $1,074, its lowest level since July. Now, with crypto lending firm Genesis struggling to raise money and rumors of bankruptcy circulating on Nov. 21, investors have reason to be concerned.
However, a Genesis spokesperson told Cointelegraph that the company is continuing discussions with its creditors and has no plans for imminent bankruptcy.
Concerns over the centralization of decentralized finance (DeFi) surfaced after Uniswap Labs changed its privacy policy on Nov. 17, harassing publicly available blockchain data, user browser information, operating system data, and service providers. It has been revealed that we will collect your correspondence with.
Adding to the ruckus, the hackers behind the $447 million theft of the FTX exchange have been spotted moving their Ether funds. On November 20th, the attacker transferred his 50,000 ETH to another wallet and converted it to Bitcoin using two renBTC bridges.
Traders fear that hackers may be using leveraged short bets to keep the price of Ether down in order to profit. The rumor was raised by @kundunsan on November 15th, but the Twitter post was never made public.
Unpopular opinion:
SBF is a hacker who has already shorted the market and has stolen all the stolen assets. $ETH
Finally, he dumps his huge ETH bag to make his short position even more profitable.
He’s still rubbing on us, unbelievable. https://t.co/CYJmOSgwXODarvish (@kundunsan) November 15, 2022
Let’s take a look at Ether derivatives data and understand if the downturn in market conditions is affecting crypto investor sentiment.
While retail traders typically avoid quarterly futures due to price differentials with the spot market, they are the preferred vehicle for professional traders as they avoid the fluctuations in funding rates that often occur with perpetual futures contracts.
The 3-month futures annualized premium should trade between +4% and +8% in healthy markets to cover the costs and associated risks. The chart above shows that derivatives traders have been bearish since November 10, when Ether futures premiums were negative.
There is currently backwardation in the contract, and this situation is unusual and usually seen as bearish. The metric did not improve after ETH rose his 5% on Nov. 22. This reflects the reluctance of professional traders to add leveraged long (bullish) positions.
Traders should also analyze the Ether options market to rule out externalities inherent in futures products.
A 25% delta skew is a sign that market makers and arbitrage desks are overcharging for upside or downside protection.
In a bear market, the skew indicator exceeds 10% as options investors set higher odds for a decline. On the other hand, in a bullish market, skew indicators tend to be below -10%, meaning bearish put options are discounted.
Delta skew has crossed the 10% threshold since November 9th, indicating that options traders are less inclined to offer downside protection. Things got worse over the next few days as the delta skew index spiked above 20%.
With the 60-day delta skew currently at 23%, whales and market makers are placing high odds on Ether’s price decline. As a result, derivatives data show less confidence as Ethereum struggles to hold the $1,100 support.
Ether bulls shouldn’t throw in the towel just yet, as these indicators tend to be negative, according to the data. The public evidence of reserves and institutional investors’ added bitcoin exposure could disappear quickly if interpreted positively by market participants.
That said, at the moment, Etherbear is still dominant according to ETH derivatives indicators.
The views, thoughts and opinions expressed herein are those of the author only and do not necessarily reflect or represent the views or opinions of Cointelegraph.
