Traders pin Ethereum’s route to new ATH to eventual Bitcoin ETF approval

[AlviNess]

The price of Ether (ETH) is lagging Bitcoin's (BTC) price action by 13% in October, but is this relevant? To date, the altcoin has still outperformed BTC by 274% in 2021. However, traders tend to be short-sighted and some will question whether the Ethereum network can successfully migrate to proof of stake (PoS) validation and finally solve the high gas fees issue.

Pro traders are unfazed by the recent price stagnation
To determine whether professional traders are leaning bearish, one should start by analyzing the futures premium — also known as the basis rate. This indicator measures the price gap between futures contract prices and the regular spot market.

Ether's quarterly futures are the preferred instruments of whales and arbitrage desks. These derivatives might seem complicated for retail traders due to their settlement date and price difference from spot markets, but their most significant advantage is the lack of a fluctuating funding rate.


Ether three-month futures basis rate. Source: Laevitas.ch
The three-month futures typically trade with a 5% to 15% annualized premium that follows the stablecoin lending rate. By postponing settlement, sellers demand a higher price, and this causes the price difference.

As depicted above, Ether's failure to break the $3,600 resistance has not caused a shift in pro traders' sentiment because the basis rate remains at a healthy 13%. This shows that there is no excessive optimism at the moment.more