Ether’s Price Struggles: Battling Traditional Markets and Regulatory Whirlwinds

Ether: Riding the Rollercoaster Post-Market Crash

Since the significant market crash on May 12, which dragged Ether (ETH) down to a staggering $1,790, the cryptocurrency has been trying hard to stay afloat. Currently, ETH has clung onto a support level at $2,000, but let’s be real – the skepticism among traders is thicker than a foggy London morning. The correlation with the stock market feels like that clingy ex who just won’t let go.

The Ripple Effect of Traditional Market Uncertainties

These days, the Federal Reserve appears to be the main puppet master pulling the strings of all markets. All eyes are fixated on inflation, and as the central banks globally work overtime to bring it down, traders find themselves in a state of uncertainty. The link between crypto and the S&P 500 index has been as tight as a can of sardines, staying above 0.85 since March 29. In simpler terms, betting on Ether decoupling from traditional markets seems like trying to unglue two pieces of tape – not happening anytime soon!

The Fed’s Tightrope Walk: A Balancing Act of Inflation and Employment

U.S. Federal Reserve Chairman Jerome Powell recently confirmed on May 17 that he’s on a mission to combat inflation, even if it means raising interest rates until he resembles that stern principal we all dreaded in school. However, with great power comes great responsibility. Powell warned that this tightening could also impact unemployment rates. The irony of trying to stabilize prices while avoiding a job crisis is a nail-biter, folks!

Regulatory Hurdles Adding to Ether’s Headaches

As if things weren’t dicey enough, Ether’s price faced further pressure from a rather alarming document released on May 16 by the U.S. Congressional Research Service (CRS). This document pointed out that the stablecoin industry isn’t exactly rolling in regulatory security. And to top off this rollercoaster ride, the Ethereum network’s total value locked (TVL) saw a 12% nosedive in just a week. From a healthy 28.7 billion Ether, it plummeted to a mere 25.3 billion. Talk about a downturn!

Futures Market Sentiment: A Potential Sign of Distress?

Now, let’s turn to the future – quite literally! Ether futures contracts, often preferred by whales and market makers, have been performing rather poorly. The quarterly futures are typically traded at a premium to spot markets, ideally falling within the 5% to 12% range during healthy market conditions. Unfortunately, they currently find themselves in the danger zone, trading below that 5% threshold. A stark reminder that the market is in distress. Meanwhile, leveraged buying demand is practically nonexistent, and Ether’s TVL crash has undoubtedly sent bullish sentiments packing.