Ethereum price closes in on $4K, but traders’ excessive optimism is a warning sign

Ether (ETH) bulls continue to dominate as the altcoin’s price skyrockets by 13% in just 7 days, reaching a new high of $3,900. This marks the first time since December 2021 that Ether has reached this level, solidifying its position as the top competitor with a market capitalization of $456 billion. However, caution should be exercised as the use of excessive leverage through ETH derivatives could potentially jeopardize this current bullish trend.

Stay updated on the latest news about crypto, including the recent surge in Helium and the latest developments in the decentralized web 3.0. With the growing presence of crypto in the market, platforms like Kraken crypto exchange and Keep Network crypto are gaining traction. Even well-known figures like Gary Vee are recognizing the potential of web 3.0 and its impact on the future. As we enter the metaverse, it’s clear that it is an integral part of web 3.0 and should not be overlooked. Keep an eye on the latest updates on Gala crypto and the influx of funding in the crypto space.

Could Ether’s price surpass $4,800 during this cycle?

Optimistic Ether investors are hopeful that the current bull run will result in a new all-time high, similar to Bitcoin’s surge on March 5. However, overly positive sentiment could lead to forced liquidations. To determine if $4,800 is a realistic target for this cycle, we must address the criticism and fear, which could hinder Ether’s potential for growth.

Aside from the common belief that the Ethereum network lacks scalability, which has been partially resolved through layer-2 solutions, some analysts point to the platform’s dependence on the Ethereum Foundation and lack of regulatory clarity as obstacles to Ether’s bullish momentum.

SEC chairman Gary Gensler has stated that cryptocurrencies that allow staking may be considered securities, as they resemble lending. However, the decision on the Ether exchange-traded fund (ETF) on May 23 could settle this debate, with a 50% to 70% chance of approval according to analysts.

While there is some validity to the criticism of centralization, a report from Electric Capital shows that the number of developers joining the Ethereum ecosystem grew by 16,700 in 2023, almost four times more than those joining Solana. This makes it difficult to argue that Ethereum’s development is concentrated in a select few companies.

Helium Crypto: The Latest Updates on the Crypto Market and Web 3.0

The current state of the crypto market and the emergence of Web 3.0 have been the hot topics in the world of cryptocurrency. One of the latest developments is the surge in open interest of Ether futures, reaching an all-time high of $13.4 billion on March 6. This signals a high demand for leverage among traders, posing a risk of overconfidence.

The surge in the Ether futures premium, which measures the price of monthly contracts against regular spot exchanges, reaching its highest point in over 18 months, further adds to the concern. This premium has surpassed the 10% neutral threshold, peaking at 23%, indicating excessive demand for long positions. While this may reflect confidence from professional traders, it also increases the risk of liquidations due to volatility.

Additionally, the demand for bullish leverage positions from retail traders has also reached its highest level in over 18 months. This is evident in the positive funding rate of perpetual contracts, which is recalculated every eight hours. A funding rate above 0.05%, equivalent to 1% per week, is a sign of overconfidence.

However, the recent data on Ethereum network metrics does not support further appreciation of Ether’s price. In the past 30 days, DApps on the Ethereum network have seen a 6% decline in volume and an 11% decrease in the number of active addresses. In comparison, competitors BNB Chain (BNB) and Solana (SOL) have experienced a significant growth in volume.

While some may attribute the recent bullishness in Ether’s price to the potential approval of a spot ETF, the excessive leverage from both retail and professional traders, more than 12 weeks ahead of the decision date, casts doubt on the sustainability of a surge above $4,800.

In the midst of all this, there have also been updates on other cryptocurrencies such as Helium, Keep Network, and Gala, as well as discussions on the role of the metaverse in Web 3.0. With the constant developments and debates surrounding the crypto market and Web 3.0, it is important to stay informed and cautious in the world of crypto funding.

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