Ethereum futures ‘slow down’ implies 30% upside to Merge

Ethereum futures 'slow down' implies 30% upside to Merge

Ether (ETH) bulls seem to have a positive spread between their spot price and their ETH futures price, due to the “contango it shows optimism about a higher rate in the future. But since August 1, the Ethereum futures curve has been sliding in the opposite direction.

Quarterly Ethereum futures in recession

On the daily chart, the quarterly Ethereum futures contracts, which are due to expire in December 2022, have moved into the retracement, a condition opposite to contango, in which the futures price becomes lower than the spot price.

The difference between the spot price and the Ethereum futures price reached -8 dollars on August 1st.

ETH230-ETHUSD daily price chart. Source: Trade View

On one hand, the current spot price of ETH seems to be above its year-end expectation as a bearish sign. However, the conditions surrounding the current negative spread between Ether’s spot price and Ether’s future price suggest that traders may actually be bullish on ETH.

For example, bitcoin (BTC) has gained 15% since its futures retreated in late June for the first time in a year.

ETH could recover thanks to “airdrop”

In addition, a potential split in the bullish channel is likely as the Merge approaches in September, according to some analysts.

Roshun Patel, former VP of Institutional Lending at Genesis Trading, noted that December Ether futures moved into the recession due to Ethereum “fork chances”, which could prompt traders to buy ETH in cash dry before blending.

At the same time, Patel indicated that traders could offset their upside risks in the spot market by taking bearish positions in Christmas futures.

We are going back to ETH which is starting to have a price in the probability range. In 2020 the game with the bchabc fork was to buy the spot and sell the quarter — Roshun Patel (@roshunpatel) July 31, 2022.

This statement follows Galois Capital’s survey of the Merger. In this poll that took place on Twitter on July 28, the cryptocurrency hedge fund asked its followers whether or not the Merger would split the Ethereum chain into two parts: ETH1 proof-of-work (PoW) and proof -work. (PoW).stake (PoS) ETH2.

Of those surveyed, 33.1% said the upgrade would result in a hard fork, while 53.7% expected a smooth network transition.

Question 1: What happens during the Merger? If option 2 or 3, skip to questions 2-5. — Galois Capital (@Galois_Capital) July 27, 2022

A potential Ethereum chain split means that ETH holders on both chains will have the same amount of tokens. In other words, it will be like that airdrop granted ETH has the same amount of ETH1 tokens, like Ethereum Classic (ETC) in 2016.

ETH Price Technical Indices Show ‘Golden Cross’

Ether is now consolidating within a key resistance bar at $1,650-$1,750 which served as support during the May-June 2022 session.

Meanwhile, there was a 20-day (green) and 50-day (red) exponential moving average (EMA) as well as a “golden cross,” which would suggest a tentative tentative outlook.

ETH/USD daily price chart. Source: Trade View

A break of the $1,650-$1,750 resistance bar could allow ETH to target $2,150 as its next target. This level was resistance in May and June and support in January. It now coincides with the 200-day EMA (the blue wave) near $2,180, up nearly 30% from the August 1 price.

Also read: Ethereum Merge: How will the PoS transition affect the ETH ecosystem?

Conversely, a pullback from the resistance bar could expose ETH towards the waves of the 20-day EMA (~$15,250) and the 50-day EMA ($1,500).

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of All investment and trading involves risk. You should do your own research before making a decision.

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