Ethereum News Today: "Spot ETFs Shield Ethereum from Altcoin Crash Volatility"

Ethereum (ETH) has shown signs of stabilizing after a sharp 20.7% flash crash that saw over $3.82 billion in leveraged long liquidations, with key derivatives metrics indicating a return to market equilibrium. The price reclaimed the $4,100 level on Sunday, with analysts highlighting four factors suggesting a potential rebound toward $4,500. Perpetual futures annualized funding rates for ETH plunged to -14%, reflecting short traders paying to maintain bearish positions-a dynamic typically unsustainable over extended periods. This anomaly, coupled with monthly futures regaining a 5% premium over spot markets, suggests weak product design rather than strong bearish sentiment in derivatives Cointelegraph^[1].

Options markets on Deribit further signaled balanced conditions, with put-to-call ratios showing no unusual stress. Trading volumes remained stable, and put (sell) options activity was slightly lower than call (buy) options, indicating a healthy equilibrium. A sharp rise in options volume, which would signal anticipatory bearish positioning, did not materialize, reinforcing the view that the flash crash caught traders off guard Cointelegraph^[1]. Meanwhile, ETH outperformed most altcoins during the crash and subsequent 48 hours, with SUI, AVAX, and ADA experiencing intraday corrections of 84%, 70%, and 66%, respectively. Ether's resilience is attributed to its $23.5 billion in spot ETFs and $15.5 billion in options open interest, which provide a buffer against volatility compared to smaller rivals Cointelegraph^[1].

Funding rates for ETH futures have since stabilized, with the 60-day futures premium returning to neutral territory. This contrasts with the heightened volatility seen in March and late 2024, when funding rates reached all-time highs alongside price surges. While current rates remain positive, they are not at levels indicative of aggressive buyer positioning, suggesting room for further market expansion if key resistance levels are breached FX Leaders^[3]. Analysts caution that derivatives market distortions may persist until market makers regain confidence-a process potentially spanning weeks or months. However, this should not be interpreted as a bearish signal for ETH's broader momentum Cointelegraph^[1].

The broader crypto market remains under scrutiny, with over $19 billion in liquidations reported during the October 10 flash crash. Wiston Capital's Charlie Erith noted that altcoins excluding Bitcoin and ETH fell 33% in 25 minutes, while Bitcoin held up relatively better. He emphasized tracking Bitcoin's 365-day EMA and volatility metrics like the VIX to gauge the next phase of market behavior. For ETH, the focus remains on support levels at $3,430 and $3,810, with a rebound to $4,280 seen as a plausible target if buyers defend these levels The Block^[5].