Key takeaways:

• The ETH futures premium shows that investors remain cautious and avoid high leverage even as bank stocks rebound from recent credit woes.

• Etheric whale activity near $3,700 suggests constrained bearishness, although belief in a quick rally towards $4,500 remains frail.

Ether (ETH) fell 9.5% on Friday, retesting the $3,700 level and triggering $232 million in long-leveraged liquidations in 48 hours. The unexpected correction came amid a broader shift away from risk on credit concerns after two U.S. regional banks announced bad loan write-offs.

Ether derivatives data shows moderate concern among bullish traders, but whale positioning suggests most do not expect a deeper decline. The key question now is whether the $3,700 support will be maintained as macroeconomic risks intensify.

The 25-delta deviation of ether options rose to 14% on Thursday, a level rarely sustained and often associated with periods of heightened fear. Investors pay a premium for puts (puts), signaling that market makers remain concerned about the risk of loss. Under normal market conditions, the deviation usually ranges from -6% to +6%.

The S&P Regional Banks Select Industry Index recovered some of Thursday’s losses, rising 1.5% on Friday. However, credit concerns weighed on larger financial institutions such as JP Morgan (JPM) and Jefferies Financial Group (JEF), which reported losses related to the auto sector. According to According to Yahoo Finance, car loans showed the fastest growth among banking segments in the US.

Joachim Nagel, president of the German Bundesbank and a member of the ECB’s governing council, warned of possible “side effects” from the private credit market, calling them a “regulatory risk.” Nagel common his concerns to CNBC over the fact that the global private credit market has surpassed $1 trillion, adding that “we as regulators need to look at this closely.”

The monthly ETH futures premium compared to spot markets has fallen to 4%, below the neutral 5% threshold. Traders’ moods were already shaken by the piercing crash of October 10, and the last noticeable phase of growth took place in early February. Ether traders appear to be increasingly doubtful of the strength of any sustained uptrend.

US-China trade tensions deepen, but ETH whales are not bearish

Part of trader concern stems from deteriorating U.S.-China relations as the ongoing trade war enters a modern phase, including controls on uncommon earth exports and sanctions on a South Korean shipping company. US President Donald Trump said on October 10 that the United States may impose an additional 100% tariff on Chinese goods from November 1 in response.

To determine whether ethereal whales are actually betting on further declines or are simply hedging against deteriorating macroeconomic conditions, it is useful to examine the positions of top traders on derivatives exchanges. This indicator combines data from the futures, margin and spot markets, offering a clearer picture of short-term sentiment.

Top traders on Binance trimmed their bullish bets (long positions) from Tuesday to Thursday, but later reversed course, increasing their exposure to ETH despite continued price weakness. In contrast, top traders at OKX tried to time the market by adding exposure near the $3,900 level, but ultimately gave up when prices fell to $3,700 on Friday.

Related: How to spot altcoin market manipulation before it crashes

ETH derivatives markets do not show any worrying signals – on the contrary. The hesitation by bulls to take leveraged positions seems hearty, especially after the extreme volatility that occurred on October 10. However, Ether’s path towards $4,500 will likely depend on clearer signals from credit conditions and US labor market data, meaning any recovery could take some time.

This article is for general information purposes and is not and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.