Falling tech stock prices, declining DApp usage, and declining derivatives data are keeping the price of ETH below $2,000.

The 12 hour close of Ether (ETH) has been trading in a tight range of $1,910 to $2,150 for the past 12 days, but oddly enough, according to the data, those 13% fluctuations were enough to freeze futures contracts from May 13. liquidate Coinglass for a total of $495 million.

Ethereum/USD 12 hour price on Kraken. Source: Trading View
Deteriorating market conditions have also affected digital asset investment products. According to the latest edition of CoinShare’s weekly report on digital asset fund flows, crypto funds and investment products recorded $141 million in outflows in the week ended May 20. redemption.

Russian regulation and collapsing US tech stocks exacerbate the situation
Regulatory uncertainty weighed on investor sentiment after an updated version of Russia’s mining law was released on May 20. The document in the lower house of the Russian parliament did not include any obligation to register cryptocurrency miners, nor an annual tax amnesty. As quoted by local media, the legal department of the State Duma said that these measures “may entail costs for the federal budget.”

Additional pressure on the price of ether came from a 2.5% drop in the Nasdaq Composite index on May 24. In addition, the indicator heavily focused on tech stocks came under pressure after social media platform Snap (SNAP) plunged 40% due to rising inflation, supply chain restrictions and business disruptions. As a result, Meta Platforms (FB) shares fell 10%.

On-chain data and derivatives speak for bears
The number of active addresses in decentralized applications (DApps) of the largest Ethereum network decreased by 27% compared to the previous week.

The most active DApps of the Ethereum network in USD. Source: DappRadar
In the most active decentralized applications of the network, the number of users has significantly decreased. For example, Uniswap (UNI) V3 weekly addresses fell by 24%, while Curve (CRV) saw a 52% drop in users.

To understand how professional traders, whales and market makers are positioned, let’s look at the Ether futures market data.

Quarterly futures are used by whales and arbitrage firms primarily because there is no fluctuating funding rate. These fixed-month contracts typically trade at a small premium to the spot markets, indicating that sellers are asking for more money to hold settlement longer.

These futures should trade at a 5% to 12% annual premium in healthy markets. This situation is technically defined as “contango” and is not exclusive to the cryptocurrency markets.

Ether futures for 3 months on an annualized basis with a premium. Source: Laevitas
Related: Bitcoin price returns to weekly lows below $29,000 as Nasdaq leads US stocks to plunge again

The premium for Ethereum futures contracts fell below the neutral market threshold of 5% on April 6. Leverage buyers are clearly unconvinced as the current 3% base remains low.

Ether could rise 2% after testing the $1910 channel resistance on May 24, but network data shows no user growth, while derivatives data points to bearish sentiment.

Until there is some improvement in morale that pushes dapp usage and the Ether futures premium returns to the neutral 5% level, the chances of the price breaking the $2,150 resistance seem remote.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. When making a decision, you should do your own research.

Source: CoinTelegraph