4 April Ether Price Outlook: Memecoin Collapse Crushes ETH Activity
The price of Ether has increased from its low of $1,768 on March 30, but the altcoin has had difficulty returning to the $2,000 mark. Some traders think that the decline is partly due to the collapsing memecoin market, which greatly decreased activity throughout the decentralized apps (DApps) ecosystem and the larger crypto space, even if it wasn’t limited to the Ethereum network.
Ether is down 45.99% so far this year. Traders are far from positive, according to its derivative analytics, and have little faith in a robust comeback anytime soon. The premium on Ether futures compared to spot markets is evidence of this. The figure is still below the neutral 5% level, even though it increased from 2% on March 31 to 4% on April 2.
Whales Fear More ETH Declines as Options Market Shows Rising Risk Aversion
One should examine the ETH options market to determine whether whales and market makers are unconfident in Ether’s performance. The 25% delta skew, which normally ranges from -6% to 6%, should be evenly distributed across call (buy) and put (sell) options under neutral circumstances. Although the Ether delta skew indicator has dropped from its peak of 9% on March 31, the current reading of 7% indicates that risk aversion sentiment is still high. It might take longer for traders to rebuild confidence, as the growing cost of hedging suggests that whales are afraid of more ETH declines.
Ether’s price reduction can be mostly attributed to the 49% decline in Ethereum DApp revenue from January to March. Though the decreased network activity restricts the number of new users and lowers the demand for ETH generally, its benefits over conventional financial markets and its hegemony in decentralized finance (DeFi) do not change.
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