Ethereum’s Rocky Road
Since April 21, Ethereum has faced hurdles in maintaining its support level at $1,850. After a rally to $2,100 on April 13, it’s been a steep drop, with a 13.5% correction taking place over just six days. Ouch! And if that wasn’t enough to raise eyebrows, a staggering $548 million in leveraged futures longs were liquidated between April 19 and April 21, sending many investors into a panic.
Regulatory Ripe: The New KYC Norms
Centralized exchanges are tightening their belts, and this affects Ether’s market. For example, Bybit is now requiring users to complete Know Your Customer (KYC) verification by May 8 to carry out trading activities. Until then, non-KYC users can only withdraw 100,000 USDT monthly — which sounds like a bad joke at a bad comedy show. Meanwhile, the U.S.-based Gemini is resorting to launching a derivatives platform outside the country, finding refuge in contexts less regulated. But hold your horses; it’s only available to select regions, and guess what? Most of us are excluded!
Diminishing DApps on the Ethereum Network
It seems Ethereum’s appeal for decentralized applications (DApps) is waning. The total deposits on Ethereum’s smart contracts have plummeted to levels last seen in August 2020. According to DefiLlama, as of April 24, DApps on Ethereum held 15.3 million ETH in total value locked (TVL). That’s a 30% drop from the 22 million ETH six months prior. Talk about a slippery slope!
Transaction Fees: The Final Straw?
Ethereum network dominance is also in decline, with stablecoin deposits falling from 64% to 54% since December 2022. The once-premium network now can’t seem to shake off its high transaction fees — averaging above $4 since February. In contrast, the Tron network has charmed its way into traders’ hearts with lower fees, gaining momentum in stablecoin trades.
Trader Sentiment: Bearish Vibes All Around
If you thought the bad news was over, think again! A closer inspection of the options market reveals that professional traders seem to be leaning toward bear territory. With a put-to-call ratio of 1.40, it signals more bears in town, as protective put options outnumber bullish calls by more than four times. Traders are placing their bets on further decline, perhaps sensing the ship might not right itself soon.
Conclusion: A Support Level Under Siege
Given the troubling regulatory landscape, dwindling DApp engagement, and the increasing habits of derivative traders favoring bearish outcomes, it’s safe to say that Ethereum faces a daunting battle to maintain its $1,850 support level. Keep your helmets on, folks; this ride’s about to get bumpier!
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