Ethereum has fallen further as I predicted in my last update on the coin, where I said the, “weekly chart hints at further losses“. ETH has since fallen from $366 to lows of $313. The coin has a chance to recover the damage but it needs to buyers at this level.
According to data from analysts at Skew, ETH had 460,000 options due to expire tomorrow. The options are worth around $415 million and the expiry could lead to further volatility in the coin. Much of the coins were bought above the $340 level which is only $10 from the current price so, we can’t rule out a rally to see the options pay out. A rise in the U.S. dollar has driven commodities lower in the last week and we could see a spike in the ETH price ahead of tomorrow’s expiry to increase the profits in options.
Ethereum’s price rally from the mid-March lows was driven by the boom in Decentralized Finance (DeFi) projects, but there are signs of a pause due to the rising price of Ethereum and congestion on its network. More platforms have been creating tokens on the ETH blockchain and popular DeFi platforms such as Uniswap and Aave are pushing to roll out later 2 scaling solutions. Ethereum’s long-awaited upgrade to version 2.0 of its blockchain was said to target scalability so this will be an important driver of the price going forward.
The longer-term picture for DeFi is still good and this will support ETH in the future. Investors used to earn yields from their bank, but now they can do it via smart contracts. The push by central banks to lower interest will only increase the popularity of the platforms.
Ethereum Technical Outlook
ETHUSD fell through support around $365 and now trades at $327.88. The coin just needs to find buyers here for a close above the $330 level in order to see further gains. If the coin doesn’t find support then the uptrend line below could see it drop to the $250 level. The Investing Cube Trading Course is available for traders looking to build their skills in technical analysis and risk management.
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Ethereum Daily Chart
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