How Does the Concept of ‘Contango’ or ‘Backwardation’ Apply to Futures Contracts on Vulnerable Altcoins?

Contango (futures price > spot price) and backwardation (futures price < spot price) reflect market expectations. For a vulnerable altcoin, a high degree of contango might reflect a high cost of carry (e.g. high borrowing rates or storage costs) or an expectation of future price recovery.

Backwardation might signal a strong bearish sentiment, indicating traders expect the coin's price to drop significantly, possibly due to an anticipated security event.