{"id":540612,"date":"2023-01-18T23:30:00","date_gmt":"2023-01-18T20:30:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/ethereum-price-rally-under-question-after-eth-slams-into-resistance-at-1-6k\/"},"modified":"2023-01-18T23:30:00","modified_gmt":"2023-01-18T20:30:00","slug":"ethereum-price-rally-under-question-after-eth-slams-into-resistance-at-1-6k","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/ethereum-price-rally-under-question-after-eth-slams-into-resistance-at-1-6k\/","title":{"rendered":"# Ethereum price rally under question after ETH slams into resistance at $1.6K"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a4174bdf259a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a4174bdf259a\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-price-rally-under-question-after-eth-slams-into-resistance-at-1-6k\/#%E2%80%9D_Ethereum_price_rally_under_question_after_ETH_slams_into_resistance_at_16K_%E2%80%9C\" >&#8221; Ethereum price rally under question after ETH slams into resistance at $1.6K &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-price-rally-under-question-after-eth-slams-into-resistance-at-1-6k\/#Ethers_33_rally_was_not_enough_to_instill_confidence\" >Ether\u2019s 33% rally was not enough to instill confidence<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/ethereum-price-rally-under-question-after-eth-slams-into-resistance-at-1-6k\/#Options_markets_are_neutral_adding_strength_to_the_16K_resistance\" >Options markets are neutral, adding strength to the $1.6K resistance<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Ethereum_price_rally_under_question_after_ETH_slams_into_resistance_at_16K_%E2%80%9C\"><\/span>&#8221; Ethereum price rally under question after ETH slams into resistance at $1.6K &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-5a4050f8>Ethereum (ETH) price is struggling to overcome resistance at $1,600 and this is the altcoin\u2019s third attempt since September 2022. Some would say the 33% year-to-date rally could be interpreted as a failed opportunity to breach the $200 billion market capitalization mark.\u00a0<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/7480e5f6-b268-4148-8835-eda551bbe935.png\"><figcaption style=\"text-align: center;\"><em>Ether\/USD price index, 2-day. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>If Ethereum price were to break above $1,600, it would return Ether to a top-60 global tradable asset, surpassing giant multinational companies like Nike (NKE), Novartis (NVS), Cisco (CSCO) and Toyota (TM). <\/p>\n<p>Unfortunately, at least for bullish traders, derivatives markets are not hinting that Ether will finally break the $1,600 resistance \u2014 at least, not until the U.S. Federal Reserve reverses its course of tightening the economy.<\/p>\n<p>Bulls&#8217; frustrations can partially be explained by Silvergate Bank&#8217;s $1 billion net loss in the latest quarter. The crypto-friendly bank laid off roughly 40% of its workforce on Jan. 5 and it now faces a class-action lawsuit over its FTX and Alameda Research dealings. The suit alleges that Silvergate aided and abetted FTX&#8217;s fraudulent activities and the exchanges&#8217; breaches of fiduciary duty.<\/p>\n<p>The negative <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>flow continued on Jan. 17, as Japan&#8217;s deputy director-<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> of the Financial Services Agency&#8217;s Strategy Development and Management Bureau, Mamoru Yanase, argued that the crypto sector should face the same regulation as traditional banks and brokerages.<\/p>\n<p>The fact that Ether continues to trade above $1,500 is a positive, but the most recent price pump closely followed an 8% gain by the Russell 2000 index. In addition, investors fear that data showing a reduction in inflation was the main driver behind the cryptocurrency market recovery, so any retreat in the stock market could trigger another wave of selling. <\/p>\n<p>Consequently, investors believe that Ether could retrace its recent gains if the U.S. Federal Reserve keeps raising interest rates. Let&#8217;s look at Ether derivatives data to understand if the surprise pump positively impacted investors&#8217; sentiment.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Ethers_33_rally_was_not_enough_to_instill_confidence\"><\/span>Ether\u2019s 33% rally was not enough to instill confidence<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Retail traders usually avoid quarterly futures due to their price difference from spot markets. Meanwhile, professional traders prefer these instruments because they prevent the fluctuation of funding rates in a perpetual futures contract.<\/p>\n<p>The two-month futures annualized premium should trade between +4% to +8% in healthy markets to cover costs and associated risks. However, when the futures trade at a discount versus regular spot markets, it shows a lack of confidence from leverage buyers, which is a bearish indicator.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/b11885c2-9390-4477-8dec-b67e9af0658f.png\"><figcaption style=\"text-align: center;\"><em>Ether 2-month futures annualized premium. Source: Laevitas.ch<\/em><\/figcaption><\/figure>\n<p>The chart above shows that derivatives traders remain in &#8220;fear mode&#8221; because the Ether futures premium is below the 4% threshold. This data indicates the absence of leverage buyers&#8217; demand, although it does not signal that traders expect further adverse price action.<\/p>\n<p>For this reason, traders should analyze Ether&#8217;s options markets to understand whether investors are pricing higher odds of surprise adverse price movements.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Options_markets_are_neutral_adding_strength_to_the_16K_resistance\"><\/span>Options markets are neutral, adding strength to the $1.6K resistance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The 25% delta skew is a telling sign when market makers and arbitrage desks are overcharging for upside or downside protection.<\/p>\n<p>In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 10%. On the other hand, bullish markets tend to drive the skew indicator below -10%, meaning the bearish put options are discounted.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/9f6f5eef-1fe2-434e-ba2b-da718d9ea211.png\"><figcaption style=\"text-align: center;\"><em>Ether 60-day options 25% delta skew: Source: Laevitas.ch<\/em><\/figcaption><\/figure>\n<p>The delta skew improved considerably since Jan. 14, declining from a neutral-to-bearish positive 10% to a neutral options pricing. The movement signaled that options traders became more comfortable with downside risks since the 60-day delta skew stands at negative 2%.<\/p>\n<p><strong>Related: <\/strong><strong><em>Bitcoin and Ethereum correct as Bitzlato take down, tech layoffs and economic worries dominate headlines<\/em><\/strong><\/p>\n<p>Whales and market makers are yet to become optimistic according to options markets, but the absence of fear after a 33% rally is encouraging. Both options and futures markets point to pro traders fearing that the $1,600 resistance will continue to exert a negative impact on price. <\/p>\n<p>In essence, a more effective measure from the FED is likely needed before crypto investors flip bullish \u2014 either signaling the interest rate hike is close to an end, or a shift on the strategy to curb inflation.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<p class=\"post-content__disclaimer\">The views, thoughts and opinions expressed here are the authors\u2019 alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.\n<\/p>\n<p class=\"post-content__disclaimer\">This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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Some would say the 33% year-to-date rally could be interpreted as a failed opportunity to breach the $200 billion market capitalization&#8230;<\/p>\n","protected":false},"author":1,"featured_media":540613,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/d8698574-23a9-4fa8-8622-9a0e8e48ae13.jpeg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74863,74860,75012,82402,74891,81210,74938,75846,74939,73785,70359],"class_list":["post-540612","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-ether-price","tag-ethereum","tag-ethereum-options","tag-ethereum-price","tag-futures","tag-market-analysis","tag-markets","tag-stocks"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/540612","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=540612"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/540612\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/540613"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=540612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=540612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=540612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}