Data suggests professional traders have some skepticism about the robustness of the rebound for Ethereum after the price of ETH declined below the $2,000 barrier level.
The strong 82.8% rise since the rising wedge formation started on July 13 surely looks to be a success for bulls even though Ether (ETH) rejected the $2,000 barrier on August 14. As the network anticipates the Merge transaction to a proof-of-stake (PoS) consensus network on September 16, the ideal of “ultrasound money” unquestionably draws closer. Some detractors note that the move away from proof-of-work (PoW) mining has been put off for years and that the Merge does not deal with the scalability problem. The network should transition to parallel processing in late 2023 or early 2024.
The EIP-1559 burn mechanism, which was first deployed in August 2021, was crucial for making ETH scarce, as crypto analyst and influencer Kris Kay demonstrates: Despite removing the need to fund the pricy, energy-intensive mining activities, the highly anticipated switch to the Ethereum main chain received a lot of criticism.
What Do Charts Indicate?
Undoubtedly, a supply shock resulted from the reduced number of coins for sale, especially in light of Ether’s recent 82.8% surge. Though no guarantees were offered for immediate transfers after the Merge, these investors were aware of the dangers associated with ETH 2.0 staking. Ether’s derivatives markets data can help investors identify where whales and arbitrage desks are located.
The skew indicator would exceed 12% if the market players were concerned about an Ether price fall. Generalized enthusiasm, however, has a negative 12% skew. Since Ether started the uptrend, the skew indicator has been neutral, even when it tested the $2,000 resistance on August 14. Since ETH option traders are now evaluating comparable risks of both an upward and downward price movement, the lack of change in market mood is quite alarming. The long-to-short data, meanwhile, indicate little confidence near the $2,000 level.