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Tuesday, June 11, 2024
HomeCrypto$4,000 ETH gradually becoming a distant dream?

$4,000 ETH gradually becoming a distant dream?

ETH has been trading below $3,750 for the past three days, despite the upcoming launch of Ethereum spot exchange-traded funds (ETFs) in the United States. Some argue that the lack of bullish momentum for ETH is due to the lack of clarity around how long it might take regulators to approve funds’ S-1 forms. As a result, ETH investor optimism according to derivatives data dropped to its lowest level in 3 weeks.

ETH price is bearablep force belong to regulations are uncertain

However, even as the U.S. Securities and Exchange Commission (SEC) approves each filing from BlackRock, Fidelity, VanEck and others this week, investors are concerned about current market conditions. does not support the need for an Ethereum ETF. Part of the lack of enthusiasm for cryptocurrencies stems from regulatory uncertainty, but there are also some concerns on the macroeconomic front as the real estate market shows further signs of stress.

Coinbase, Binance, and Kraken are facing lawsuits for allegedly failing to register as brokers while offering securities investments. The SEC and the US Department of Justice also charged crypto companies including privacy-focused instruments such as Samourai Wallet and Tornado Cash. Furthermore, regulators claim ETH staking service intermediaries can be considered securities, as there is a promise of profit in exchange for the work of others.

Even if there are no imminent events on the cryptocurrency regulatory front, investors are still uncomfortable holding assets considered riskier during a potential economic downturn. On June 6, Moody’s Ratings said at least six US regional banks are at risk of having their debt ratings downgraded due to their “significant focus on commercial real estate”, which is already being affected by interest rates. higher yield.

The New York Times published a story on May 24 regarding the Chinese housing market, where nearly 4 million apartments without buyers are lying vacant. The article notes that government incentives to buy such properties with state-sponsored loans have failed to prevent housing prices from plunging and emphasizes that developers “remain on the brink of bankruptcy.” debt” is “closely linked to local banks and the financial system”.

Less favorable macroeconomic conditions explain why Bitcoin failed to break above $71,000 on June 7, dampening ETH investors’ expectations of potential capital inflows into Ethereum Spot ETFs. Worsening sentiment is evident in ETH futures and options metrics, which have turned to their most pessimistic point in over three weeks.

Reduced confidence in the derivatives market ETH

Professional traders prefer monthly contracts due to the lack of funding rate. In neutral markets, these instruments trade with spreads ranging from 5% to 10% to account for extended settlement periods.

Fee contract difference future ETH 2 months compared to the spot market | Source: Laevitas.ch

Data reveals that ETH futures spreads fell to 13% on June 10, down from 15% on June 6. While far from a bearish structure, this is the lowest level in more than three weeks. This is certainly not expected as some analysts suggest that the Ethereum ETF could capture up to 20% of Bitcoin’s inflows on similar instruments.

Traders should also analyze the options market to assess whether investors are becoming less optimistic. If investors expect the price of ETH to decline, the 2-month delta skew index should increase above 8%, and periods of euphoria tend to result in a -8% skew.

eth

ETH options delta deviation 2 months| Source: Laevitas.ch

The ETH options contract’s 25% delta skew last ventured to the upside on May 29, but the latest -6% level is fairly neutral and balanced, meaning whales and makers The market is currently placing a similar ratio of positive and negative price swings on ETH price.

As ETH futures and options are showing less bullish signs despite spot Ethereum ETF trading expected to launch in the United States, ETH price is unlikely to surpass $4,000 in the near future. upcoming time.

You can see ETH price here.

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According to Cointelegraph

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
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