. “3 Ethereum Price Metrics Show Resistance at $1,750 Level”

The price of Ether (ETH) dropped 7% between June 14th and 15th, reaching its lowest point in three months and causing investors to doubt its potential to reach the $2,000 level of support.

It is noteworthy that Ether’s market capitalization of $196 billion, as represented by the $1,620 bottom, is greater than PetroChina’s $186 billion and nearly equal to chipmaker AMD’s $198 billion.

Achieving the position of 66th largest global tradable asset in the world is no small accomplishment, especially considering that cryptocurrency is only 8 years old and does not provide any direct income for the upkeep of the project. Conversely, securities are able to benefit from corporate earnings and government subsidies, so investors should be wary of the recent dip in Ether’s price.

Ether price pressured succumbs to regulation and lowered network activity

The SEC’s proposed alteration to the definition of an exchange had a restraining effect on investors’ enthusiasm for Ether, to which Paul Grewal, chief legal officer of Coinbase exchange, objected, asserting that it was in contravention of the Administrative Procedure Act.

Despite gas fees dropping by 75%, the utilization of decentralized applications (Dapps) on the Ethereum network was unable to gain traction. On June 14, the 7-day average transaction cost decreased to $4 from the $16 seen a month before. However, during the same time frame, Dapps active addresses decreased by 18%.

It is noteworthy that the decrease was experienced across the board, impacting decentralized finance (DeFi), NFT marketplaces, gaming, and collectibles. Interestingly, the total value locked (TVL), which gauges the funds locked in Ethereum’s smart contracts, dropped by only 2% compared to mid-May, amounting to 14.6 million ETH, as reported by DefiLlama.

In order to assess the likelihood of Ether’s price falling below the $1,650 support level, one should assess the reduced ETH futures premium and the increased cost of protective put options.

Quarterly futures of Ether are favored by whales and arbitrage desks. Nevertheless, these contracts with fixed expiration dates are usually priced slightly higher than spot markets, suggesting that sellers are demanding higher compensation for postponing settlement.

ETH futures contracts in healthy markets should typically have an annualized premium of 5-10%, a phenomenon known as contango which is not exclusive to crypto markets.

Professional traders have been avoiding bullish bets, as evidenced by the futures premium, also known as the basis indicator, which is still far from the neutral 5% threshold despite a slight improvement to 2%.

To account for any external factors that may have only affected Ether futures, one should evaluate the ETH options markets. The 25% delta skew indicator examines corresponding call (purchase) and put (sell) options and will be positive when fear is dominant since the protective put option cost is greater than the call options.

If traders become fearful of a potential Ether price crash, the skew indicator will rise above 8%. Conversely, if there is a general feeling of enthusiasm, the skew will be at a negative 8%. As seen, the delta skew has been showing signs of apprehension since June 10th and reached its highest point of 21% on June 15th, the highest it has been in three months.

Here is an account of the events that transpired in the cryptocurrency world today.

Ether’s price looks poised to drop down to $1,560

Investors can be so focused on the short-term price movements of Ether that they forget that its price has increased by 37% since the beginning of 2023. Furthermore, traders may be overlooking signs of decreasing demand for Dapps when they over-rely on the Ethereum Network’s $24 billion total value locked (TVL).

At present, bears appear to have the advantage when it comes to ETH derivatives metrics, and it appears that a revisit of the $1,560 support is the most probable result. This does not mean that the gains for 2023 are in peril, but until the regulatory-related uncertainty fades away, it will be difficult for bulls to push Ether beyond the $1,750 resistance.