{"id":560708,"date":"2023-03-08T00:00:00","date_gmt":"2023-03-07T21:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/ethereum-price-action-and-derivatives-data-confirm-that-bears-are-currently-in-control\/"},"modified":"2023-03-08T00:00:00","modified_gmt":"2023-03-07T21:00:00","slug":"ethereum-price-action-and-derivatives-data-confirm-that-bears-are-currently-in-control","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/ethereum-price-action-and-derivatives-data-confirm-that-bears-are-currently-in-control\/","title":{"rendered":"# Ethereum price action and derivatives data confirm that bears are currently in control"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 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-6a2d20685b1ed\" 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-6a2d20685b1ed\" 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-action-and-derivatives-data-confirm-that-bears-are-currently-in-control\/#%E2%80%9D_Ethereum_price_action_and_derivatives_data_confirm_that_bears_are_currently_in_control_%E2%80%9C\" >&#8221; Ethereum price action and derivatives data confirm that bears are currently in control &#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-action-and-derivatives-data-confirm-that-bears-are-currently-in-control\/#Recession_risks_increase_favoring_ETH_bears\" >Recession risks increase, favoring ETH bears<\/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-action-and-derivatives-data-confirm-that-bears-are-currently-in-control\/#ETH_derivatives_show_reduced_demand_for_longs\" >ETH derivatives show reduced demand for longs<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Ethereum_price_action_and_derivatives_data_confirm_that_bears_are_currently_in_control_%E2%80%9C\"><\/span>&#8221; Ethereum price action and derivatives data confirm that bears are currently in control &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-48054ca8>The price of Ether (ETH) declined 6% between March 2-3, followed by a tight range trading near $1,560. Still, analyzing a wider time frame provides no clear trend, as its chart can point to a descending channel or a slightly longer seven-week bullish pattern.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/a78443ef-a9b0-4db4-9d62-a20ed600abc3.png\"><figcaption style=\"text-align: center;\"><em>Ether (ETH) price index in USD, 1-day. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>Ether&#8217;s recent lack of volatility can be partially explained by the upcoming Shanghai hard fork, an implementation aimed at allowing ETH staking withdrawals. Those participants were each required to lock 32 ETH staked on the Beacon Chain to support the network consensus protocol.<\/p>\n<p>After a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of delays, typical for changes in the production environment, the Shanghai Capella upgrade \u2014 also known as Shapella \u2014 is expected for early April, according to Ethereum core developer and project coordinator Tim Beiko. The Goerli testnet upgrade on March 14 will be the final rehearsal for the Shanghai hard fork before it is rolled out on the mainnet.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Recession_risks_increase_favoring_ETH_bears\"><\/span>Recession risks increase, favoring ETH bears<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>On the macroeconomic front, United States Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee on March 7. Powell <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/finance.yahoo.com\/news\/powell-tells-congress-rates-will-likely-be-higher-than-previously-anticipated-150011657.html\">stated<\/a> that interest rates will likely rise higher than anticipated after &#8220;the latest economic data have come in stronger than expected.&#8221;<\/p>\n<p>Evidence points to the Fed lipping behind the inflation curve, boosting the odds of harder-than-expected interest rate increases and asset sales by the monetary authority. For instance, an inflation &#8220;surprise&#8221; index from Citigroup <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/finance.yahoo.com\/news\/feds-powell-hill-appearance-views-060353424.html\">rose<\/a> in February for the first time in more than 12 months.<\/p>\n<p>For risk assets, including cryptocurrencies, a more substantial move by the Fed typically implies a bearish scenario as investors seek shelter in fixed-income and the U.S. dollar. This shift becomes more pronounced in a recessionary environment, which many speculate is either coming or already here.<\/p>\n<p>Adding additional pressure is the regulatory environment for cryptocurrency firms, especially after U.S. Press Secretary Karine Jean-Pierre said the White House has noted that the crypto-friendly bank Silvergate &#8220;experienced significant issues&#8221; in recent months. <\/p>\n<p>Let&#8217;s look at Ether derivatives data to understand if the $1,560 level is likely to become a support or resistance.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"ETH_derivatives_show_reduced_demand_for_longs\"><\/span>ETH derivatives show reduced demand for longs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The annualized three-month futures premium should trade between 5% and 10% in healthy markets to cover costs and associated risks. However, when the contract trades at a discount (backwardation) versus traditional spot markets, it shows a lack of confidence from traders and is deemed a bearish indicator.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/1b918e1d-7347-4a77-b6ee-f92ea2587253.png\"><figcaption style=\"text-align: center;\"><em>Ether 3-month futures annualized premium. Source: Laevitas.ch<\/em><\/figcaption><\/figure>\n<p>The chart above shows that derivatives traders became slightly uncomfortable as the Ether futures premium (on average) moved to 3.1% on March 7, down from 4.9% one week prior. More importantly, the indicator became more distant from the 5% neutral-to-bullish mark.<\/p>\n<p>Still, the declining demand for leverage longs (bulls) does not necessarily translate to an expectation of adverse price action. Consequently, traders should analyze Ether&#8217;s options markets to understand how whales and market makers are pricing the odds of future price movements.<\/p>\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 metric below -10%, meaning the bearish put options are in less demand.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/6b3d1c5d-bbc3-4fdc-a928-ba0cd3e14f64.png\"><figcaption style=\"text-align: center;\"><em>Ether 30-day options 25% delta skew: Source: Laevitas.ch<\/em><\/figcaption><\/figure>\n<p>The delta skew moved above the bearish 10% threshold on March 4, signaling stress from professional traders. A brief improvement h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ened on March 7, although the metric continues to flirt with bearish expectations as options traders place higher costs on protective put options.<\/p>\n<p>Investors basing their decisions on fundamentals will likely expect the first couple of weeks following the Shanghai upgrade to measure the potential impact of the ETH unlock. Ultimately, options and futures markets signal that pro traders are less inclined to add long positions, giving higher odds for $1,560 becoming a resistance level in the coming weeks.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/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.\n<\/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<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/ethereum-price-action-and-derivatives-data-confirm-that-bears-are-currently-in-control\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Ethereum price action and derivatives data confirm that bears are currently in control &#8220; The price of Ether (ETH) declined 6% between March 2-3, followed by a tight range trading near $1,560. Still, analyzing a wider time frame provides no clear trend, as its chart can point to a descending channel or a slightly&#8230;<\/p>\n","protected":false},"author":1,"featured_media":560709,"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\/2023-03\/c5c4f209-e8f8-461c-9496-ba547744395e.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74863,74860,82402,74891,81210,75846,74939,70550,70551,73785,81175],"class_list":["post-560708","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-ether-price","tag-ethereum","tag-ethereum-options","tag-futures","tag-market-analysis","tag-federal-reserve","tag-inflation","tag-markets","tag-shanghai"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/560708","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=560708"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/560708\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/560709"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=560708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=560708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=560708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}