Ether’s Recent Rally: A Closer Look
Between November 28 and December 5, Ether (ETH) surged an impressive 11.3%, hitting a high of $1,300. However, this peak met with reality as it faced a subsequent 4.6% rejection, bringing it back down to the $1,240 mark on December 6. This repeating resistance level at $1,300 has been a persistent barrier, holding strong for twenty-six days, and might just be the culprit behind the recent price correction. Traders are breathing a sigh of relief, given that Ether remains 16% above the low of $1,070 recorded on November 22. Yet, there’s undeniable frustration in failing to break past that stubborn level all week.
The Regulatory Clouds: Silvergate Bank and FTX’s Fallout
Investor sentiment took a hit when news surfaced that three members of the U.S. Senate had requested information from Silvergate Bank concerning its ties with FTX. The inquiry arose following claims that Silvergate had facilitated FTX customer fund transfers to Alameda Research. The bank, meanwhile, positioned itself as a victim of FTX’s alleged mishandlings. This scrutiny has led many to wonder whether stricter regulations are on the horizon, further exacerbating anxieties among traders.
Guidelines and Regulatory Uncertainty
Adding to the tension, reports emerged about the UK Treasury working on guidelines to curb cryptocurrency sales from outside its borders. This move would empower the Financial Conduct Authority (FCA) to step up monitoring of crypto operations in the region. As the financial services and markets bill takes shape, investors are left wondering how much more oversight will trickle down, especially for assets like Ether.
Traders’ Sentiments: The S&P 500’s Influence
Amidst all this, some traders, like CashMontee, believe that the S&P 500’s movements shall dictate the fate of crypto. With the monthly level projected at 1205, there’s a sense that even with bearish news, the crypto market could still defy gravity—at least for now. Still, the looming $1,200 support level raises red flags for many investors.
Derivatives Data: A Reflection of Market Sentiment
To further unpack the current scenario, let’s delve into Ether’s derivatives data. Retail traders often shy away from quarterly futures, while seasoned traders favor them to manage risks. When the futures trade at a discount compared to spot prices, it signals a bearish outlook—this is indeed the current state as Ether futures premiums remain negative. This bearish sentiment can dampen hopes of immediate bullish movements.
Options Markets: Cautiously Optimistic?
Looking at the options markets brings a different sheen. The 25% delta skew, a critical indicator for market sentiment, has held steady recently. Although this suggests that traders are becoming more comfortable with potential downside risks, the current delta skew of 12% hints that market makers are inching towards a neutral sentiment regarding Ether. It’s a precarious balance as the push for higher regulation continues to weigh heavily on the market.
The Future Outlook: Awaiting Economic Indicators
The macroeconomic landscape holds crucial upcoming events that could sway Ether’s direction. With the EuroZone and Canada releasing their GDP figures on December 7, followed by the U.S. Consumer Price Index (CPI) on December 13, investors are keeping a close watch on how these indicators might influence trading behavior. For now, the bull run seems threatened as regulatory news continues to loom over the crypto markets.
