Following the announcement that the SEC has filed lawsuits against Binance and oinbase">Coinbase, the price of Ether briefly dipped to $1,780. However, it is reasonable to posit that Ether’s bullish investors should be content that its value did not fall below the support level that has been in place for 67 days.
The SEC’s recent actions have both positive and negative implications for Ether (ETH), and various analysts on Crypto Twitter have attributed the rebound in Ether’s value to its exclusion as a security in the lawsuits against Binance and oinbase">Coinbase. The SEC specifically referenced BNB $262, Solana $19, and Cardano $0.323, which are direct rivals to Ethereum’s smart contract-processing capabilities.
As pointed out by Jevgenijs Kazanins, an analyst, the fact that Ether was not mentioned in the SEC’s lawsuits does not necessarily imply that it has received regulatory approval from the SEC.
As per the observations made by Jevgenijs Kazanins, an expert analyst, the exclusion of Ether in the SEC’s lawsuits does not necessarily indicate that the SEC has granted regulatory approval to Ether.
Kazanins has raised a pertinent query regarding the possibility of the SEC pursuing a separate lawsuit against the Ethereum Foundation. While at present, this notion is an unverified conjecture, it holds weight, particularly considering that Gary Gensler, the SEC Chairman, declined to respond to inquiries regarding Ether’s status during the U.S. House Financial Services Committee in April 2023.
Currently, traders can concentrate on Ether’s price performance, network data, and other metrics that may influence investor sentiment and short-term pricing.
The Total Value Locked (TVL) metric gauges the number of deposits secured in Ethereum’s decentralized applications (DApps), which have been experiencing a downward trend since mid-March. On June 3, the indicator hit a low of 14.35 million ETH, but it rebounded to 14.6 million ETH by June 6, as reported by DefiLlama.
The count of active addresses that engage with DApps has also witnessed a decline. In the past month, the leading 12 DApps operating on the Ethereum network have witnessed a 4% rise in active addresses, despite the average transaction gas fee remaining above $6.50.
In the event that investors are apprehensive about the likelihood of Ether breaching the $1,800 support level, such concerns should be evident in the premium of the ETH futures contract and the augmented expenses associated with protective put options.
As regulations have intensified, Ether derivatives metrics have remained neutral. Quarterly futures for Ether are widely used by whales and arbitrage desks. Nevertheless, these contracts that are set to expire in fixed months usually trade at a slight premium in relation to spot markets, indicating that sellers are demanding a higher price to postpone settlement.
Consequently, in robust markets, ETH futures contracts ought to trade at an annualized premium of 4 to 8%, a scenario commonly referred to as contango, which is not exclusive to cryptocurrency markets.
Based on the basic indicator, which denotes the futures premium, proficient traders have been refraining from leveraged long positions (optimistic wagers). Despite this, even the re-examination of the $1,780 threshold on June 6 did not prompt those whales and market makers to adopt a pessimistic outlook.
To eliminate any extraneous factors that may have exclusively influenced Ether futures, it is recommended to scrutinize the ETH options markets. The 25% delta skew indicator measures similar call (buy) and put (sell) options and will become positive when there is a prevalent sense of fear, as the premium for protective put options will be higher than that for call options.
If traders are apprehensive about a potential drop in Ether’s price, the skew indicator will surpass 8%. Conversely, if there is widespread enthusiasm, the skew will be negative and below 8%. As demonstrated earlier, on June 5, the 25% delta skew exceeded the positive 8% threshold, signaling a bearish outlook. However, the subsequent surge to $1,880 on June 6 has restored the metric to a neutral condition.
To sum up, the three indicators demonstrate robustness in the Ethereum network, including the TVL rebound to 14.6 million ETH, the 4% surge in active addresses of DApps, and a negligible influence on Ether derivatives markets, despite the recent re-examination of the $1,800 threshold.
As per the derivatives metrics, professional traders do not appear to have been deterred by the recent test of the 67-day support level, and Ethereum network usage data remains healthy.
Therefore, the likelihood of an imminent price crash seems to have been significantly reduced, and the bulls appear to have evaded a potential setback.
