As a researcher with years of experience navigating the volatile cryptocurrency market, I can confidently say that this recent dip in Ether (ETH) price to $3,337, following a decline in Bitcoin (BTC), is a reminder of the rollercoaster ride we’re all on. However, I find it intriguing how Ether derivatives markets remain neutral to bullish, hinting at $4,000 still being within reach.
On December 26, the price of Ether (ETH) fell to $3,337, undoing the gains from the past two days. This dip was likely due to a 4% drop in Bitcoin (BTC), which caused approximately $34 million in liquidations for those with leveraged long positions on ETH (buyers). As indicators of vulnerability appeared in the U.S. job market, investors became increasingly cautious.
Regardless of Ether’s prices failing to stay above $3,500 during the last week, the derivatives market still maintains a neutral to optimistic posture, hinting that $4,000 could be achievable. Interestingly, Chinese stablecoins are trading at the same rate as the official U.S. dollar, signaling no substantial withdrawals of cryptocurrencies in that region.
Over the last seven days, the price difference between USDT (a stablecoin) and the U.S. dollar in China has mostly remained equal, indicating a balanced market outlook. Usually, strong demand causes stablecoins to trade at a premium of 1.5% or more compared to the official USD rate, while sluggish markets may result in lower prices.
Last week’s ether derivatives held steady, indicating that traders stayed undisturbed by multiple unsuccessful attempts to surpass $3,500. Meanwhile, ETH monthly contracts are currently priced 11% higher than the spot market, slightly above the usual 5% to 10% neutral zone.
Despite Ether traders possibly feeling discouraged by a 9.5% drop over a week, it’s important to note that even gold, often seen as the most valuable asset globally, has decreased by 4% in the last fortnight. This trend has led investors to move towards cash positions, causing the U.S. dollar index (DXY) to reach its highest point in two years.
In recent days, the U.S. dollar has grown stronger compared to other significant international currencies, a trend that’s been observed through the DXY index reaching 108.3 on December 26th – an increase from 106 just a month before. This surge in the dollar’s value is primarily driven by speculations about the Federal Reserve’s potential to lower interest rates next year. As a result, traders are moving towards holding cash positions due to increased concerns about economic downturns or recessions.
There’s growing doubt among investors about the accuracy of reported employment statistics. A December 12 report from the Philadelphia Fed suggested lower state-level employment in Q2 compared to figures provided by the Bureau of Labor Statistics (BLS). This discrepancy might lead to a possible reduction of approximately 818,000 jobs in 25 states up until March.
Economic worries worldwide have intensified. The possibility of fresh tariffs with American trade allies could worsen inflation and dampen long-term expansion, as suggested by Reuters. Simultaneously, recent data published on December 26 showed that new jobless claims in the U.S. reached a one-month minimum, suggesting a moderating yet steady job market.
To gauge the feelings of investors in Ethereum, keeping an eye on network deposits is crucial. The desire for Ether is influenced significantly by Decentralized Applications (DApps), so on-chain activity serves as a vital signpost for predicting price trends.
Over the last fortnight, Ethereum‘s Total Value Locked (TVL) has held steady around 20 million ETH, demonstrating its robustness. In the past month, some standout performers in the DeFi space have been Ethena, which saw a surge of 49%, and Morpho, with a gain of 47%, according to DefiLlama statistics. Interestingly, most Ethereum DApps have seen an increase in deposits, except for Maker, which dipped by 12% during this timeframe.
Based on both derivative indicators and on-chain measurements, it appears that traders are generally optimistic about the future price of Ether. Yet, reaching $4,000 depends significantly on the state of the worldwide economy as a whole.
This post serves as a source of general knowledge and isn’t meant to serve as legal or financial guidance. The perspectives, ideas, and viewpoints presented here belong solely to the writer and may not align with those held by CryptoMoon.
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2024-12-26 22:13