Ether (ETH) has seen a significant drop of 14.8% and has been trading below $3,300 since April 14. The price of ETH has tested the $3,000 level multiple times, but buyers have stepped in to offer support. There are concerns that ETH may not be able to reclaim $3,500 without a stronger narrative. According to analyst DeFiSurfer808, the weakness in Ether’s price compared to Bitcoin (BTC) is due to a lack of fresh fundamentals and a new narrative.
Ether has underperformed Bitcoin by 16% over the past two months, and this trend intensified after Jan van Eck, the chief investment officer of VanEck investment firm, mentioned that U.S. requests for a spot Ether ETF might be rejected in May. The U.S. Securities and Exchange Commission (SEC) has been inactive in regards to seven pending applications for spot Ether ETFs. This regulatory uncertainty dampens investor enthusiasm for the Ethereum ecosystem, including decentralized finance (DeFi) and nonfungible token (NFT) marketplaces.
Uniswap Labs, a popular decentralized exchange, announced that it was prepared to fight after receiving a potential enforcement notice from the SEC. The regulatory landscape is also shifting, as two lead SEC attorneys resigned following accusations of “gross abuse” of power. The Blockchain Association and the Crypto Freedom Alliance of Texas have initiated a lawsuit against the SEC, challenging its broad interpretation of the term “dealer” and the regulatory burden it creates for digital asset businesses.
Despite the price drop, on-chain and derivatives data for Ether paint a different picture. Ethereum’s total value locked (TVL) reached its highest level since July 2022, indicating increased demand for Ethereum decentralized applications (DApps). Innovative platforms such as EigenLayer, Uniswap, Pendle, and Renzo have contributed to this growth. In contrast, Tron’s TVL has decreased, with its largest DeFi application, JustLend, seeing a reduction in deposits.
The ETH options skew metric, which indicates market sentiment, showed an increase in bearish anticipation between April 9 and April 18. This trend reversed as ETH traded below $3,000. Currently, there is a balanced dynamic between call and put options, suggesting a neutral market sentiment.
While Ether’s price has struggled to maintain the $3,000 support level, on-chain metrics and derivatives data show resilience. It may be premature to expect a bull run beyond $3,500, given the subdued investor enthusiasm regarding the prospects of a U.S. spot Ether ETF approval.
This is ridiculous! Ether keeps dropping and there’s no end in sight!
The balanced sentiment in options trading reflects the cautiousness in the market. It’s important to monitor how it evolves in the coming days.
The SEC attorneys’ resignation is definitely a significant development. It could pave the way for positive changes in the regulatory landscape.