ETH TRADERS EYE $3K, HISTORICAL DATA FLAGS 

Ether (ETH) enthusiasts are eyeing a milestone at $3,000, anticipating a continuation of its recent surge. Over the past ten days, ETH has gained 21.5%, nearing the $2,800 mark. This positive trend is part of a broader crypto market momentum, driven by increased interest in the newly launched spot Bitcoin (BTC) exchange-traded fund (ETF) in the United States. However, historical data suggests caution as ETH approaches the $3,000 level, given its previous correction of 46% after testing this threshold in March 2022.

Supporting the bullish case for ETH is the possibility of it being the second cryptocurrency to have a spot ETF listed on US exchanges. Such an approval would set Ethereum apart from competitors like Solana (SOL) and BNB Chain (BNB) in terms of accessibility and regulatory clarity, particularly amid ongoing lawsuits against exchanges like Binance and Coinbase by the US Securities and Exchange Commission (SEC). Additionally, the upcoming Dencun network upgrade scheduled for March 13 aims to enhance Ethereum’s layer 2 by reducing transaction costs and increasing block space, potentially driving higher demand for ETH through increased DApp usage and smart contract deposits.

Despite these positive factors, ETH bulls face the challenge of sustaining the $3,000 price level. Historical data from April 2022 shows that after a 42% gain in three weeks leading up to April 3, ETH experienced a subsequent 46% drop over the next 40 days. This volatility underscores the uncertainty surrounding ETH’s ability to maintain such high price levels.

Analyzing ETH futures premium and options markets can provide insights into market sentiment. The ETH futures premium, which surged above 10% on February 10, suggests increased bullish sentiment as ETH climbed from $2,300 to $2,800. However, this level is not considered excessive compared to the 5.5% annualized premium observed in April 2022. Similarly, the 25% delta skew metric, indicating professional traders’ positioning, entered the -7% threshold for bullish markets on February 9, signaling moderate optimism.

Traders speculating on an ETH price increase based on the likelihood of an Ethereum spot ETF approval should be cautious, especially considering the potential for liquidation due to price volatility. While the odds of approval may appear favorable, uncertainties remain until the SEC’s final decision deadline on May 23. Despite these challenges, derivative metrics suggest a different scenario compared to April 2022, highlighting the dynamic nature of ETH price movements.

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