Weak stocks and declining DeFi usage continue to weigh on Ethereum

Weak stocks and declining DeFi usage continue to weigh on Ethereum – Mail Bonus

The 12-hour closing price of Ether (ETH) has been tight at $ 1,910 to $ 2,150 for 12 days, but oddly enough, these 13% fluctuations have been enough to break a total of $ 495 million in forward contracts since May 13, according to data from Coinglass.

Ether / USD 12 hour price in Kraken. Source: TradingView

Deteriorating market conditions were also reflected in investment products for digital assets. According to the latest issue of CoinShare’s weekly report on Digital Asset Fund Flows, cryptocurrencies and capital goods saw a $ 141 million outflow in the week ending May 20th. In this case, Bitcoin (BTC) was the focus of investors after experiencing $ 154 weekly. net redemption.

Russian regulation and the collapse of US technology stocks are exacerbating the situation

Uncertainty in the regulatory framework intensified in investors’ attitudes after an updated version of the Russian Mining Act’s proposal came to light on 20 May. . According to local media reports, the Ministry of Foreign Affairs said that these measures could “potentially have a cost to the federal budget”.

Additional pressure on Ether prices came from the 2.5% drop in the Nasdaq index on 24 May. In addition, there was pressure on the high-tech stock-driven index after the social media Snap (SNAP) fell by 40%, citing rising inflation, supply chain restrictions. and work disruptions. As a result, Meta Platforms (FB) shares fell by 10%.

Data on the chain and derivatives are in favor of bears

The number of active addresses in the distributed applications of the largest Ethereum network (DApps) has decreased by 27% from the previous week.

The most active DApps Ethereum network in USD terms. Source: DappRadar

The network’s most active distributed applications significantly reduced the number of users. For example, Uniswap V3 reduced weekly addresses by 24% while Curve faced 52% fewer users.

To understand the position of professionals, whales and market makers, let’s look at Ether’s future market data.

The quarterly future is used by whales and arbitral tribunals primarily due to the lack of a volatile funding ratio. These fixed-term contracts usually trade with a slight premium to the placement markets, indicating that sellers want more money to hold on to settlements for longer.

These futures contracts should trade at a 5% to 12% annual spread in healthy markets. This condition is technically defined as “contango” and is not limited to cryptocurrencies.

Ether forward 3-month annual premium. Source: Laevitas

Connected: Bitcoin prices return to weekly lows below $ 29K as Nasdaq leads fresh dip in US stocks

Ether’s futures contract fell below the 5% neutral market threshold on 6 April. There is a clear lack of conviction from debt buyers because the current 3% baseline is still depressing.

Ether may have gained 2% after testing $ 1,910 channel resistance on May 24, but data on the chain show a lack of user growth, while derivatives data point to a bearish attitude.

Until there is a moral improvement that increases the use of distributed applications and the Ether future premium returns to the 5% neutral level, the probability of the price breaking above the $ 2,150 resistance seems low.

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