After falling below the $1,400 level for the first time nearly two months earlier in the session, ether ,ETH) has managed to gain some sobriety in view of the release of A Mixed US jobs report for February.
ETH, the cryptocurrency that powers smart-contract-enabled Ethereum The blockchain was last changing hands near $1,425, following lower-than-expected US wage growth and a surprising jump in the US unemployment rate to 3.6%.
he still leaves ether Still down close to 1.0% on the session and down close to 7.0% over the past 24 hours. ETH price dropped from the mid-$1,500s on Thursday amid a combination of related concerns The Collapse of Crypto-Friendly Silvergate Bank and a growing liquidity crisis at fellow crypto-friendly bank SVB Financial.
Selling pressure increased after New York Attorney General Refers to Ether as a Security In the ongoing lawsuit against KuCoin. Crypto markets have been fretting in recent weeks about a regulatory crackdown by US authorities and some fear that the US Securities and Exchange Commission may soon attempt to crack down on ether, claiming it is an unregistered cryptocurrency. There is security.
Some have also cited Biden administration’s latest budgetWhich will try to crack down on crypto tax loss harvesting as a headwind for prices.
ETH Liquidations Spike Due to Price Drop
The latest drop in ETH price has resulted in an unprecedented increase in leveraged long position liquidations. Nearly $63 million in long futures positions were liquidated on Thursday, the highest since May 23, according to data provided by Coinglass.com.third January’s
Long liquidations on Friday are also already around $30 million, which is well above the average level of recent weeks.
Options markets turn bearish
According to options market data presented by The Block, investors are increasingly taking positions for risk on the latest drop in ETH price. The delta skew of 25% of Ether options expiring in 7, 30 and 60 days has fallen to a two-month low in the -7 region.
The 25% delta option skew is a popular monitored proxy of the extent to which trading desks are charging investors more or less for the upside or downside protection through put and call options being sold. A put option gives an investor the right but not the obligation to sell an asset at a predetermined price, while a call option gives an investor the right but not the obligation to buy an asset at a predetermined price.
The 25% delta option skew above 0 suggests that desks are charging more for equivalent call options versus puts. This implies that demand for calls versus puts is higher, which can be interpreted as a bullish sign as investors are more eager to hedge (or bet) a security against a rise in prices.
Where Next for Ether (ETH) as Bulls Hold the $1,400 Level?
The fact that ETH has been able to hold above the $1,400 level for now means that a sustained, solid break below the 200-day moving average level of $1,423 has yet to occur. 200DMA acted as a strong resistance in 2022 and is seen as a key support level for 2023.
A break below this would be a major blow to the medium-term bullish ETH thesis, as a sustained break above the 200 DMA (as seen earlier this year) serves as a key indicator of a positive change in the market’s medium-term momentum. is seen in This momentum will arguably evaporate if ETH breaks below $1,400.
All eyes will be on the key US CPI inflation data release next week. ETH bulls will be hoping that the data turns surprisingly negative, as a result of which the market will reduce the risk of a 50bps rate hike from the Fed later this month. Bulls will also be hoping for some respite concerning the troubles faced by crypto-friendly US banks.
If ETH bounces higher, the February low around $1,460 is a major resistance to watch. Meanwhile, to the downside, the bears will be eyeing a retest of the $1,350 support. A break below here could open the doors for a retest of last November’s lows under $1,100.
According to DeFi Lama, citing on-chain data, this is a key area of support, as a break below it would liquidate a massive $68 million in long positions taken out on decentralized exchanges (DEXs). According to DeFi Lama, another level to watch is around $1,240, where $30 million in DEXs are at risk of being wiped out for longs.