Ether (ETH) experienced a significant drop of 14.8% between April 13 and 14 and has since traded below $3,300. Each time ETH price tested the $3,000 level, buyers stepped in, consolidating support. However, some traders remain concerned that ETH may not reclaim $3,500 without a stronger narrative.
Analyst DeFiSurfer808 believes Ether's price weakness relative to Bitcoin (BTC) stems from a lack of new fundamentals.
Ethereum deals with ongoing regulatory uncertainty
Over the past two months, Ether has underperformed Bitcoin by 16%, a trend that accelerated on April 9 after Jan van Eck, chief investment officer of investment firm VanEck, mentioned that the US could opt out. Ether ETF spot in May.
Even if Ether is not XEM a security, ongoing disputes between regulators and exchanges have dampened investor enthusiasm for the broader Ethereum ecosystem, including Second-Layer Solutions, decentralized finance (DeFi) and non-fungible Token (Non-Fungible Token) markets.
On April 11, Uniswap Labs declared itself “ready to fight” after receiving a potential enforcement notice from the US Securities and Exchange Commission (SEC). While Uniswap Labs did not reveal exact details in the Wells announcement, it asserted in a blog post that UNI is not a security and emphasized that its platform does not meet U.S. legal definitions. Ky about the stock exchange or broker.
Meanwhile, the regulatory landscape appears to be changing. Michael Welsh and Joseph Watkins, the lead SEC attorneys in the case against cryptocurrency platform DEBT Box, resigned on April 22 after a Bloomberg report revealed findings of “abuse of "blatant force" in the case. In March, federal Judge Robert J. Shelby fined the SEC for making false statements and misrepresentations in its lawsuit.
Additionally, the Blockchain Association and the Crypto Freedom Alliance of Texas initiated a lawsuit against the SEC in the Northern District of Texas. They are challenging the regulator's broad interpretation of the term “dealer” in the Securities Exchange Act of 1934, arguing that the expansion creates an ambiguous and burdensome legal landscape for digital asset business.
Ether's on chain and Derivative data tell a different story
On April 23, the price of Ether rose above $3,200, supported by growing demand for Ethereum decentralized applications (DApps). According to defillama, the network's smart contract deposits, measured by Total Value Locked, reached their highest level since July 2022 at 30.2 million ETH on April 22, marking an increase of 8% compared to the previous month.
Highlights of Ethereum's TVL growth include innovative platforms such as reStaking solution EigenLayer, decentralized exchange Uniswap, automated yield provider Pendle , and Renzo, a Liquid Staking application. In contrast, the TVL of the TRON blockchain has decreased by 5%
To understand whether professional traders turned bearish after Ether price performed poorly, one should use ETH options with a 25% delta skew as a proxy. A skew reading above 7% indicates anticipation of a price decline, while a negative skew of 7% typically reflects bullish sentiment.
The Ether options skew index showed an increase between April 9 and April 18, suggesting that traders are becoming less risk-averse. However, this trend reversed on April 19 when ETH traded below $3,000. Current data shows a balance between Longing (buy) and Short (sell) options, suggesting neutral market sentiment.
On chain metrics for Ethereum and ETH Derivative show resilience, although Ether price has recently struggled to maintain support at $3,000. However, it seems too early to predict a price rally beyond $3,500, as investors are not very excited about the prospect of Ethereum ETF spot approval in the US.
