Ethereum futures premium drops to 3-month low — Is ETH undervalued?

The ETH futures premium reached its lowest level since November 2023, but historical evidence points to a buying opportunity.

Ether (ETH) investors may be disappointed due to the 12.5% drop in the past three weeks, but will a deeper look at the asset’s data provide more hope or despair? 

Part of the recent correction can be attributed to the macroeconomic scenario, with the market no longer anticipating a decrease in interest rates by the United States Federal Reserve by March. Despite this, the Ether futures premium has plunged to the lowest level in three months, causing traders to speculate that something else is exerting pressure on ETH’s price.

The Ethereum network’s high gas fees are a constant source of discomfort for traders and investors, and it creates significant pressure to compete with blockchains focused on scalability, such as BNB Chain, Solana and Avalanche. Despite variations in decentralization across networks, the user experience for layer-1 solutions is generally more convenient. Therefore, the cost of Ethereum scalability solutions holds great relevance.

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