The price of Ether (ETH<\/a>) faced strong resistance at $1,920 after a 17.5% rally between June 15 and June 22. Several factors contributed to the limited upside, including worsening macroeconomic conditions, the regulatory cryptocurrency environment and weaker demand for decentralized applications (DApps) on the Ethereum network.<\/p>\n On June 26, a federal judge denied a motion from Binance<\/a> that could have stopped the United States Securities and Exchange Commission (SEC) from issuing public statements related to the case.<\/p>\n In addition, in its mid-year outlook, HSBC Asset Management\u2019s report warned<\/a> of an economic downturn in the U.S. in the fourth quarter, followed by a \u201cyear of contraction and a European recession in 2024\u201d. The report also noted that \u201ccorporate defaults have started to creep up.\u201d<\/p>\n Finally, International Monetary Fund chief economist Gita Gopinath told<\/a> CNBC on June 27 that central bankers should \u201ccontinue tightening\u201d by keeping interest rates high for longer than expected. <\/p>\n Usage of DApps on the Ethereum network failed to gain momentum as gas fees dropped 60%. Notably, the seven-day average transaction cost dropped to $3.7 on June 26, down from $9 four weeks prior. <\/p>\n DApp active addresses also declined by 27% in the same period.<\/p>\n A large chunk of the decline was concentrated on Uniswap and MetaMask Swap, while most nonfungible token (NFT) marketplaces saw a surge in their unique active wallets (UAW). <\/p>\n Despite Uniswap NFT Aggregator\u2019s lackluster performance, the sector faced a decent influx of users on OpenSea, Blur, Manifold, LooksRare and Unick.<\/p>\n More concerningly, however, is that the total value locked (TVL) \u2014 measuring the deposits locked in Ethereum smart contracts \u2014 reached its lowest level since August 2020. The indicator declined by 6.9% between April 28 and June 28 to 13.9 million ETH, according to DefiLlama.<\/p>\n So how are professional traders positioned for the next ETH price move? Let\u2019s look at Ether futures to gauge the odds of ETH\/USD breaking above the $1,920 resistance.\u00a0<\/p>\n ETH\u00a0quarterly futures<\/a> are the preferred instruments of whales and arbitrage desks. However, these fixed-month contracts usually trade at a slight premium to spot markets, as they demand an additional fee to postpone settlement. <\/p>\n As a result, in healthy markets, ETH futures contracts should trade at a 5\u201310% annualized premium, a situation known as contango.<\/p>\n According to the futures premium \u2014 known as the basis indicator \u2014 professional traders have been avoiding leveraged longs (bullish bets). Despite the modest improvement to 3%, the metric remains far from the neutral 5% threshold.<\/p>\n To exclude externalities that might have solely impacted the Ether futures, one should analyze the ETH options markets. The 25% delta skew indicator compares similar call (buy) and put (sell) options, and will turn positive when fear is prevalent because the protective put option premium is higher than the call options.<\/p>\n The skew indicator will move above 8% if traders fear an Ether price crash. On the other hand, generalized excitement reflects a negative 8% skew. <\/p>\n As displayed above, the delta skew has been flirting with moderate optimism since June 22 but has been unable to sustain it for long. Presently, the negative 2% metric displays a balanced demand for options.<\/p>\n Judging by the ETH derivatives metrics, and declining TVL and DApps use, bears are better positioned to defend the $1,920 resistance. Moreover, the worsening macroeconomic conditions and cryptocurrency regulatory news confirm the moderate pessimism for risk-on assets, including Ether.<\/p>\nETH price faces macroeconomic headwinds<\/h2>\n
Ethereum network demand, gas fees drop<\/h2>\n
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ETH price rally not supported by derivatives markets<\/h2>\n
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Resistance below $2,000 remains formidable<\/h2>\n