TLDR:
- Ethereum price failed to sustain recovery above $1,880 level
- ETH is trading below $1,850 and the 100-hourly Simple Moving Average
- Professional traders show little interest in buying ETH despite possible bottom
- Ethereum network still maintains strong adoption with $124.5 billion in stablecoins
- Perpetual futures funding rate has remained neutral since March 31
Ethereum (ETH) has been facing persistent challenges in its attempt to reclaim the $2,000 level. The second-largest cryptocurrency by market capitalization has experienced several failed recovery attempts, with bears actively keeping the price below key resistance levels. This article examines the current state of Ethereum’s price action, market sentiment, and underlying network fundamentals.
Ethereum made an effort to recover above the $1,880 level but couldn’t maintain momentum. The price briefly pushed beyond $1,920, reaching as high as $1,955 before sellers stepped in and forced a retreat.
A key bullish trend line with support at $1,865 on the hourly chart was broken, indicating weakening upward momentum. This pattern suggests bears remain in control of the short-term price action.
Currently, Ethereum is trading below both the $1,850 level and the 100-hourly Simple Moving Average. This positioning below important technical indicators reflects the ongoing bearish pressure in the market.
Technical Indicators Paint a Bearish Picture
The hourly MACD (Moving Average Convergence Divergence) for ETH/USD is gaining momentum in the bearish zone, reinforcing the negative outlook. Additionally, the hourly RSI (Relative Strength Index) has dropped below the 50 zone, indicating declining buying interest.
For Ethereum to initiate a meaningful recovery, it must overcome several resistance levels. The first hurdle appears at $1,865, followed by more substantial resistance at $1,920.
Breaking above $1,950 could potentially trigger a more substantial rally toward the $2,000 mark or even $2,050. However, failure to clear these resistance levels could lead to another decline, with support at $1,800, followed by $1,780 and $1,720.
Derivatives Market Shows Trader Caution
Derivatives metrics suggest professional traders lack confidence in a strong recovery for Ethereum. The premium on Ether futures relative to spot markets stands at around 4%, below the neutral 5% threshold. This indicates investors remain hesitant to turn bullish despite strengthening support at the $1,800 price level.
The options market paints a similar picture. The Ether delta skew metric currently reads at 7%, down from 9% seen in late March but still suggesting risk-aversion sentiment remains strong. This elevated cost of hedging indicates whales fear further downside for ETH.
Retail traders also appear cautious. The ETH perpetual funding rate has maintained neutrality since March 31, showing retail investors aren’t rushing to take positions. This restraint may be partly attributed to Ether exchange-traded funds (ETFs), which saw $37 million in net outflows over a recent two-week period.
Network Fundamentals Remain Strong
Despite price struggles, Ethereum’s underlying network fundamentals continue to show strength. Stablecoin holdings on Ethereum are approaching an all-time high of $124.5 billion, highlighting ongoing trust in the network for value storage.
Ethereum also maintains its leadership position in decentralized finance (DeFi) with $49 billion in total value locked (TVL). This dominance in the DeFi space demonstrates Ethereum’s continued relevance despite market fluctuations.
However, the network has seen a 49% drop in decentralized applications (DApps) revenue between January and March. This reduction in network activity may be limiting the influx of new users and dampening overall demand for ETH.
The deflating memecoin market has also played a role in reducing activity across the DApps ecosystem and broader crypto space, indirectly affecting Ethereum’s price performance.
Despite these challenges, the Ethereum network continues to expand. Its advantages over traditional financial markets and dominance in DeFi remain unchanged, suggesting significant potential for future ETH adoption.
Sentiment could shift quickly given positive developments like the Trump family’s World Liberty Financial investment in ETH and Eric Trump’s vocal support for Ether. However, for now, both professional traders and retail investors maintain a cautious outlook on Ethereum’s price prospects.
Ethereum’s price currently stands at approximately $1,812, representing a 44% decline year-to-date. While the cryptocurrency may have found a bottom around the $1,768 level, sustained recovery requires improved market sentiment and increased buying interest.
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