Ethereum's native token, Ether (ETH), has found solid support at the $1,560 level. Multiple technical and on-chain indicators are now suggesting a potential rebound toward $1,800 by the end of February.
The asset has struggled to break past the $1,680 resistance level since January 20. Despite this, a rising triangle pattern and improving sentiment in Ethereum derivatives markets are fueling optimism. Whether this bullish setup holds, however, depends on how the price behaves as the pattern approaches its inflection point in mid-February.
ETH/USD Price Index, 12-hour chart. Source: TradingView
Year-to-date, Ether is up more than 33%, much to the relief of traders. Still, repeated rejections at the $1,680 mark—combined with a challenging news environment—could empower bears and invalidate the bullish technical formation.
Recent regulatory developments have added to the uncertainty. Several U.S. senators have reportedly pressed Silvergate Bank for more clarity regarding its role in processing funds for FTX users. Earlier, the New York State Department of Financial Services opened an investigation into cryptocurrency exchange Gemini concerning statements made about its Earn lending program. Some users had believed their assets in the program were protected by the Federal Deposit Insurance Corporation (FDIC). The U.S. Securities and Exchange Commission had also charged Gemini with offering unregistered securities through its Earn product.
Amid these headwinds, the Ethereum ecosystem continues to make progress. Developers from the Ethereum Foundation announced the launch of the “Zhejiang” public testnet, which went live on February 1. This test environment allows for simulated ETH withdrawals, helping validators prepare for the proposed changes expected with the upcoming Shanghai hard fork.
To better gauge market sentiment, let’s take a closer look at Ether derivatives data. These metrics help us understand whether professional traders are growing hesitant after the latest price rejection.
Ether Futures Premium Has Not Yet Entered FOMO Territory
Retail traders often avoid quarterly futures due to price differences between futures and spot markets. In contrast, professional traders prefer these instruments because they are not subject to the funding rate fluctuations seen in perpetual futures contracts.
In a healthy market, the annualized premium for two-month futures should trade between 4% and 8% to account for carrying costs and associated risks. When futures trade below the spot market, it signals a lack of confidence among leveraged buyers and is generally considered a bearish indicator.
Ethereum 2-month futures annualized premium. Source: Laevitas.ch
As the chart above illustrates, the premium for Ether futures contracts has not yet broken into the neutral-to-bullish 4% threshold. That said, the current premium of around 3.5% does show improved sentiment compared to two weeks ago. Still, it does not indicate that traders are pricing in a strong immediate upside.
For a more complete picture, it’s useful to also analyze the Ethereum options market. This helps reveal how whales and market makers are assessing the probability of future price movements.
Options Traders Are Not Overly Concerned About Downside Risk
The 25% delta skew is a widely watched indicator that signals whether market makers and arbitrage desks are overcharging for upside or downside protection.
During bear markets, option investors assign higher probabilities to price sell-offs, which pushes the skew indicator above 10%. In bull markets, the skew tends to fall below -10%, indicating that put options are being discounted.
Ethereum 60-day options 25% delta skew. Source: Laevitas.ch
The delta skew has hovered near 0% over the past two weeks, reflecting a neutral stance among Ether options traders. This is particularly noteworthy given that Ether rallied more than 10% on January 20. It suggests that professional traders are pricing both upside and downside risks as equally likely.
Overall, both the options and futures markets indicate that whales and market makers are not eager to add leveraged long positions. At the same time, they do not seem concerned about a breakdown below the key $1,570 support level.
Traders will be watching closely to see whether Ether bulls can maintain the price within the rising triangle formation over the next two weeks. If the broader macroeconomic environment remains supportive, derivatives positioning suggests a potential rebound toward $1,800 is still in play.
For those looking to track these developments with advanced tools and real-time data, you can explore professional trading platforms that offer deep market insights.
Frequently Asked Questions
What is the significance of the $1,680 resistance level for Ethereum?
The $1,680 level has acted as a strong resistance point multiple times since late January. A sustained break above it could signal renewed bullish momentum and open the path toward $1,800.
How does the futures premium reflect trader sentiment?
The futures premium, or basis, indicates whether professional traders are willing to pay a premium for longer-dated contracts. A premium between 4% and 8% is considered healthy, while values below that range may suggest caution or bearishness.
What is the 25% delta skew in options trading?
The 25% delta skew measures the cost of out-of-the-money put options relative to call options. A neutral skew near 0% means traders see balanced risks, while positive or negative values indicate fear or greed, respectively.
What impact might the Shanghai upgrade have on Ethereum’s price?
The Shanghai upgrade, which will enable staked ETH withdrawals, is expected to reduce selling pressure and improve network participation. This could positively influence market sentiment and price stability.
Why are regulatory developments important for Ethereum’s price?
Regulatory news can significantly impact investor confidence and market liquidity. Positive developments may encourage adoption, while investigations or strict rulings can create short-term uncertainty.
How can traders monitor Ethereum’s key support and resistance levels?
Traders often use technical analysis tools, on-chain data platforms, and volume indicators to identify important price levels. Keeping an eye on derivatives data can also provide clues about market sentiment.