The price of Ether (ETH) is facing resistance at $1,920, with several factors contributing to limited upside potential. These factors include worsening macroeconomic conditions, regulatory concerns, and weaker demand for decentralized applications (DApps) on the Ethereum network. Additionally, the declining total value locked (TVL) and DApp usage metrics suggest that bears may have a better chance of keeping the ETH price below $2,000.
Macroeconomic headwinds, such as a potential economic downturn in the US and European recession, along with increasing corporate defaults, are creating a pessimistic outlook for risk-on assets like Ether. Furthermore, the regulatory environment, highlighted by the recent SEC case against Binance, adds to the negative sentiment surrounding cryptocurrencies.
In terms of Ethereum network demand, DApp usage has failed to gain momentum, with a 27% decline in active addresses and a 60% drop in gas fees. While some NFT marketplaces have seen an increase in active wallets, the overall trend is concerning. Additionally, the TVL in Ethereum smart contracts has reached its lowest level since August 2020, further indicating a decline in demand.
Looking at ETH derivatives markets, professional traders have been avoiding leveraged long positions, as indicated by the futures premium remaining below the neutral threshold. The options market also shows a balanced demand for options, with the delta skew indicator hovering around -2%.
Overall, these metrics suggest that bears are better positioned to defend the $1,920 resistance level. While it doesn’t necessarily mean that Ether will retest $1,750, it presents a significant hurdle for ETH bulls in the short term.
Summary:
– Ether (ETH) is facing resistance at $1,920 due to various factors.
– Worsening macroeconomic conditions and regulatory concerns contribute to the limited upside potential.
– Declining TVL and DApp usage metrics indicate a weaker demand for Ethereum.
– ETH derivatives markets show a preference for avoiding leveraged long positions.
– Bears have better odds of successfully defending the $1,920 resistance level in the short term.