Home
News
- Ethereum price reaches $2.6K, traders still bearish
- Ethereum’s 2.0 rollout hits roadblock, not expected before late 2022
- Fear factor reigns in the Ethereum market
Ethereum, which seeks to topple Bitcoin’s reign as the number one cryptocurrency, still lags behind Bitcoin’s recovery to the $40,000 range. As a result, Ether price surge to $2.6Kid does not evoke a bullish response as traders continue with neutral or bearish sentiments.
Ethereum’s coin, the number two decentralized applications, fell below $1800 on 23 May for the first time since 31 March. Ether has recovered some of its losses but is still below its all-time high of $4,382 reached on 12 May.
Ethereum is the second-largest cryptocurrency after Bitcoin. It has a Market Capitalization of $291.6bn on 10 June. One hundred sixteen million circulating supply of Ethereum coins are in circulation.
Ethereum is a pioneer in the Decentralized Finance sector and also runs smart contracts on the EVM. The Ethereum network allows holders of different cryptocurrencies to use their coins as mortgages for various financial services like loans, insurance, trading, and savings.
Ethereum 2.0 rollout not expected before late 2022
Ethereum is in the middle of a major upgrade, and it will also usher in a period of fresh highs. The Ethereum upgrade will change the way transactions are carried out and verified, and the fees are charged.
Ethereum co-founder Vitalik Buterin spoke at the Virtual Fintech Forum in Hong Kong on May 27 and bemoaned the labor pains associated with the Ethereum 2.0 rollout. Vitalik Buterin confirmed that there had been several internal team conflicts, and the rollout of Ethereum 2.0 is not expected before late 2022.
Ethereum fails to build upon positive sentiments
Ethereum continues to be an exception despite positive vibes from many major financial players in the cryptocurrency market. For example, Goldman Sachs analysts in a May 22 report underlined that Ethereum has a high chance of toppling Bitcoin as the major store of value.
The report also considered the growth in the decentralized applications sector and the NFT ecosystem, which has been built on the Ethereum platform. However, the next day, when the market opened, Ether’s price bottomed at $1,750.
Ethereum $1.5 billion options expiry on June 25
CoinShares released its weekly fund flows report on Monday, June 14, revealing that Ether investment products had the largest outflows, totaling $12.7 million. The point of concern is, however, the upcoming $1.5 billion options expiry on June 25. It could turn out to be the Achilles heel for Ethereum because it is 30% larger than the March 26 expiry. The March 26 expiry has led to a tanking of Rther’s price by more than 17% in five days and reached a nadir of $1,550.
3-month futures premium remains neutral-to-bearish
Ether, despite a smart 12% rally which took its price to $2.6K, did little to change the mindset of traders from bearish to bullish sentiments. In normal circumstances, the 3 month’s futures are traded at a higher price than spot exchanges. It happens because exchange liquidity risk must be taken into account. The seller is postponing settlement and therefore charges more. A 6% to 17% annualized profits on cryptocurrency lending is a sign of bullishness whenever the 3-month premium trades above that range. However, if the trading is below the cryptocurrency lending rate, it is a sign of bearish sentiments.
As the chart above reveals, the 8% premium — 26% disappears on May 13, a sure sign of heightened optimism. Post-May 13, the figures are around 2.8% which is equivalent to 10% annualized. According to this indicator, the sentiments are bearish as it hovers around the lower level of the expected range. Traders are still in a state of pensiveness and fear with regard to Ethereum.
Looking at the 25% delta skew, which compares buy and sell options, when the metric crosses 10%, it is considered that the fear factor reigns in the market. If the market is in a bullish phase, the 25% skew indicators will inverse and enter the negative range.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
