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Ethereum: Why is the encryption stuck below $ 2,000?

Ethereum: Why is the encryption stuck below $ 2,000?

Ethereum has been stuck under resistance for many days now. around $ 2000. So why is this symbolic level so difficult to cross for Ethereum?

General context of deterioration

Currently, the second largest market capitalization is still stuck under $ 2,000. A bearish trend is emerging especially in the 4 hour time unit and Ethereum failed to break this resistance at the $ 2,000 level on May 31st. $ 1,700 support should be used to anticipate a reversal. In the case of a downward crossing, Ethereum would interfere medium and long term downturn.

an general context The market is also braking the rise in the price of Ethereum. One can provoke the galloping inflation that forces the Fed to reduce its portfolio of 9 trillion assets or even the average yield of many big stock market titles like Microsoft. In general, the context is degraded on the traditional markets and this is reflected in the crypto-currency market. Investors have less respect for risky investments and therefore cryptos are currently neglected.

There are no signs of recovery to date

Assets locked on the Ethereum (Total Locked Value) network are also down, almost 5.5% for 3 weeks. The various repositories of decentralized financial protocols are deployed the collapse of the UST and the Terra ecosystem. So this small decrease is usually seen after such an earthquake in the crypto ecosystem.

For her, Ethereum is usually neglected somewhat by professional traders. To understand how professional traders are positioned, it is worth looking at future market data on Ether. Quarterly futures contracts are the preferred instruments for whales and arbitration offices due to their volatile lack of funding.

These fixed futures contracts, on a monthly basis, typically trade at a 5-12% premium to spot markets, suggesting that sellers are looking for more money for a later settlement. This situation is also common in traditional assets such as stocks and commodities. In the past month, Ether’s futures had a premium of about 3% well below the normal 5% minimum. This represents a fall in demand for these futures contracts.

Ether’s fall to $ 1,700 on May 27 resulted in more than $ 235 million in liquidation of futures contracts. For the time being, there is no really bullish signal emerging on Ethereum, be it in DeFi or futures contracts.

We will certainly have to wait for more positive market conditions in the hope that Ethereum will break this resistance at the $ 2,000 level and resume its march.

Crypto-assets are a risky investment.


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