By Chris Hollingworth 
Ether (ETH) has seen a 6.4% increase in price since hitting a low of $1,768 on March 30, but has been facing challenges in reclaiming the $2,000 level. Some traders attribute this struggle to the weakening memecoin market, which has had a noticeable impact on activity within the decentralized applications (DApps) ecosystem and the broader cryptocurrency space, although not exclusive to the Ethereum network.
Year-to-date, Ether remains down by 44%, with derivatives metrics reflecting a lack of bullish sentiment among traders and a lack of confidence in a strong recovery in the near term. This sentiment is evident in the premium on Ether futures compared to spot markets, which, while increasing from 2% on March 31 to 4% on April 2, still remains below the neutral 5% threshold.
Analyzing the ETH options market provides further insights into market confidence. The 25% delta skew, which measures the balance between buy (call) and sell (put) options, currently sits at 7%, indicating a prevailing risk-aversion sentiment among investors. The higher cost of hedging suggests that whales are concerned about further downside potential for ETH, potentially prolonging the time needed for confidence to return.
Despite a significant drop in Ethereum DApps revenue between January and March, Ethereum adoption continues to show resilience. The network’s advantages over traditional financial markets and its stronghold in decentralized finance (DeFi) remain intact. Notably, stablecoin holdings on Ethereum are approaching an all-time high, and the platform continues to lead with $49 billion in total value locked (TVL), hinting at strong potential for ETH adoption as new use cases emerge.
While metaverse applications face initial challenges and interest in memecoins and NFTs wanes, the Ethereum network continues to expand. Retail trading enthusiasm has been dampened by spot Ether exchange-traded funds (ETFs) experiencing net outflows of $37 million over the past two weeks, contributing to a neutral ETH perpetual funding rate since March 31.
Although sentiment could shift rapidly, recent positive momentum from investments by the Trump family in ETH has caught attention. However, both professional traders and retail investors currently maintain a cautious stance on ETH’s price outlook, emphasizing the need for vigilance and monitoring of market developments.
This article serves as a general overview and should not be construed as legal or investment advice. The opinions expressed herein are solely those of the author.
