On December 26, the price of Ether (ETH) plummeted to $3,337, wiping out gains madeEthereum Steady Amid two days. Following a 4% drop in Bitcoin’s value (BTC$93,709), this change caused leveraged ETH longs (buyers) to liquidate their holdings, amounting to $34 million. When warning signals about the US labour market surfaced, investors were even more risk-averse.
Ether Market Holds Optimism Despite Price Dip
The Ether derivatives markets remained neutral to optimistic despite prices falling below $3,500 last week, indicating that $4,000 is still within reach. The fact that stablecoins in China are trading at the same rate as the official US dollar rate shows that there aren’t any major withdrawals from cryptocurrencies in the country.
Traders’ lack of enthusiasm is reflected in the USDT premium’s near-parity performance in China over the last week. When demand is high, stablecoins sometimes trade at a premium of 1.5 per cent or more over the official US dollar rate, and when demand is low, prices tend to fall.
Ethereum Traders Unfazed by $3,500 Resistance
The fact that Ethereum Steady Amid derivatives stayed at last week’s levels indicates that traders were unconcerned by the cryptocurrency’s repeated inability to surpass $3,500. A small premium of 11% over the spot market price for ETH monthly contracts is just above the neutral range of 5% to 10%.
While the 9.5% weekly drop may discourage Ether traders, it’s important to remember that even gold, widely regarded as the strongest store of value, has fallen 4% in the past two weeks. The US dollar index (DXY) has reached its highest level in two years as investors have moved their money into cash holdings.
The DXY index, which measures the strength of the US dollar relative to other major world currencies, increased to 108.3 on December 26 from 106 a month prior. Traders are shifting their focus to cash holdings in response to increased recession concerns, and this has contributed to the dollar rise as investors worry about the Federal Reserve’s capacity to decrease interest rates next year.
Investors Question Job Data Accuracy
More and more investors are beginning to doubt the veracity of official employment data. There may have been a downward revision of 818,000 payrolls through March across 25 states, according to a report by the Philadelphia Fed on Dec. 12. The report indicated worse state-level employment in Q2 compared to BLS estimates.
The state of the world’s economy is a major source of worry. Reuters reports that fresh tariffs on U.S. trading partners might worsen price pressures and slow growth in the long run. According to data released that same day, new U.S. unemployment claims hit a one-month low on December 26, indicating a solid but cooling labor market.
Keeping tabs on network deposits is crucial for gauging the sentiment of Ethereum Steady Amid investors. Since Ethereum’s demand is fueled by decentralized applications (DApps), tracking on-chain activity is crucial for predicting its price.
Ethereum Steady as DApps Show Mixed Gains
Ethereum’s total value locked (TVL) has stayed relatively constant at around 20 million ETH for the last two weeks, demonstrating its robustness. Per DefiLlama data, Ethena and Morpho are two major gainers over the last 30 days, with Ethena going up 49% and Morpho up 47%, respectively. Maker stood out among Ethereum DApps, seeing a 12% decrease in deposits throughout the period, while the majority of them saw rises.
It appears that traders are still optimistic about the price of Ether. Ethereum is Steady Amid both on-chain measurements and derivatives. However, progress toward $4,000 will depend on the overall health of the global economy.
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