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Ethereum derivatives lean bullish even as ETH price sits at a key support

Ethereum price is trading near a critical support level but derivatives data suggests pro traders expect more downside in the short term.
Ether (ETH) lost the $1,750 support on March 22, which marked a 7% loss and $230 million worth of futures contracts liquidations. It has been holding near the strong support at $1,670, although investors are unwilling to open new long positions despite the price being 11% below the previous week’s high.Ether price at Coinbase, USD. Source: TradingViewBinance Chain recently surpassed Ethereum’s transaction volume, and this startling growth in unique active wallets certainly played a part in tampering with investors optimism. The nonfungible token (NFT) frenzy has been driving new projects away from the Ethereum network’s high fees.To further complicate things, multiple decentralized finance (DeFi) protocols are seeking interoperable alternatives, and PancakeSwap, Binance Smart Chain’s leading application, was able to amass $4.46 billion in total value locked (TVL).Meanwhile, Ethereum developers are trying to remedy the Berlin update situation, aiming to reduce transaction costs. The upgrade is expected to go live on April 14, but several industry leaders, including Enjin CEO Maxim Blagov, do not expect a significant impact on the cost per transaction.Let’s take a look at a few derivatives indicators to determine why investor’s expectations for Ether have dampened lately.The futures premium is still bullishBasis is frequently referred to as the futures premium, and it measures the gap of longer-term futures contracts to the current spot market levels.A 10% to 20% annualized premium (basis) is interpreted as neutral, known as contango. This …
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