• Ethereum risk reversal sunk by 20% on Tuesday following nervousness surrounding the recent crypto market crash.
  • ETH liquidated long positions reached $67.37 million in the past 24 hours as short traders prevailed.
  • Glassnode shared insights into the recent Ethereum issuance reduction proposal that has sparked criticism from the crypto community.

Ethereum's (ETH) price briefly dipped below $3,000 on Tuesday after tensions surrounding a potential Iran-Israel conflict suppressed the effect of Hong Kong's spot ETH approval. Regardless of the price dump, the recent ETH issuance reduction proposal has made the rounds again following research firm Glassnode's report.

Read more: Ethereum recovers from dip as Hong Kong ETH ETF approval sparks whale buying spree

Daily digest market movers: risk reversal dips, liquidated long positions, ETH issuance

Ethereum headlines the crypto market again with increased attention surrounding it. Here are your key market movers:

  • Ethereum investors are showing increased nervousness as ETH risk reversals have sunk 20% on Tuesday, according to QCP Broadcast. Generally, crypto bulls are exercising caution as Bitcoin and other altcoins have also posted losses following the prevalence of the Iran-Israel conflict. QCP further highlights that the market is shorting ETH gamma, indicating a sharp move either upward or downward could be amplified.
     
  • Following the Hong Kong spot ETH ETF approval, the second largest digital asset saw increasing discussions, making it the most trending token among traders, according to data from Santiment. Despite the increased attention, ETH shorts have risen by 54% as bearish sentiment around the digital asset continues increasing.
     
  • The crypto market liquidation heat map validates this as Ethereum has seen over $81.9 million in liquidations in the past 24 hours, according to data from Santiment. Liquidated long positions account for $67.4 million of the total ETH liquidations, with the largest coming from an ETH-USD swap valued at $6 million.

Also read: Ethereum price stagnates as EIP-3074 brings smart contract functionalities to wallets

  • The Ethereum Foundation's proposal to reduce ETH issuance still faces criticism despite clarifications that the aim is to maintain Ethereum's status as money and a balance in the network's governance power, according to Glassnode.

    The rise of restaking and liquid restaking tokens increases ETH's inflation rate and impacts several ETH holders. "In other words, there is a wealth transfer taking place from a shrinking pool of non-staked ETH holders, towards a growing pool of staked ETH holders," says Glassnode.

    As a result, the "real yield" could shift the "role of money" within the Ethereum ecosystem from ETH to liquid staking tokens or restaking tokens because of their significantly high yields. "A side-effect of such a development would be the projects which issue these derivative tokens gaining an outsized influence over the governance and stability of Ethereum's execution and consensus layers," stated Glassnode.

Technical analysis: ETH to trade below $3,301

Ethereum bears prevailed in the past 24 hours as its price has found it difficult to recover from the weekend slump. After a brief move toward $3,300 on Monday, expectations were that it would maintain a sideways movement in the $3,210 to $3,406 range. However, ETH declined further, settling around the $3,000 support.

ETH/USDT 1-hour chart

ETH/USDT 1-hour chart

Read more: Ethereum price recovers slightly as whales begin accumulation spree

Considering current volatility, ETH may trade inside the range of $2,852 and $3,301, both formed on Saturday. A move above the range may see it breaking past the $3,406 resistance of April 7 and testing the 3,618 key level of April 11. A further upward move will see ETH sustain bullish momentum. However, a move below the range will see ETH entering a bearish trend.

Three factors will affect this thesis: the upcoming Bitcoin halving, a potential Iran-Israeli conflict, and the Securities & Exchange Commission’s (SEC) decision on a spot Ethereum ETF.

Ethereum is trading around the $3,000 support at the time of writing.

Ethereum FAQs

Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.

Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.

Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.

Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Digital asset inflows reach record high year-to-date

Digital asset inflows reach record high year-to-date

Digital asset investment inflows saw a three-week consecutive rise, totaling $1.05 billion. Cumulative flows have hit an all-time high of $14.9 billion for the year. The majority of inflows come from US Bitcoin ETFs at $1.01 billion.

More Cryptocurrencies News

Bitcoin long-term holders begin re-accumulation after Semler Scientific and Mt Gox make major whale moves

Bitcoin long-term holders begin re-accumulation after Semler Scientific and Mt Gox make major whale moves

Semler Scientific takes a page from MicroStrategy's playbook with $40 million BTC investment. Mt Gox has yet to begin repaying users despite $9.6 billion BTC transfers across several addresses.

More Bitcoin News

Ethereum may continue outperforming Bitcoin as 'programmable money' may be ETH's new slogan

Ethereum may continue outperforming Bitcoin as 'programmable money' may be ETH's new slogan

Ethereum (ETH) followed a sideways trend on Tuesday as the crypto community seems to favor the term 'programmable money' as ETH's one-liner. Meanwhile, whales have continued accumulating ETH despite profiting from the recent price spike.

More Ethereum News

Pepe sell signal hints at 20% crash before bulls come back Premium

Pepe sell signal hints at 20% crash before bulls come back

Pepe (PEPE) price has shown resilience in the past two weeks, with the most recent rally nearly doubling the meme coin’s market value. However, due to the nature of the recent impulsive move, investors can expect a short-term correction, which could be an opportunity for patient and long-term buyers.

More Pepe News

Bitcoin: BTC struggles, but $80K is at striking distance Premium

Bitcoin: BTC struggles, but $80K is at striking distance

Bitcoin (BTC) price is in a good position to resume the bull rally despite the recent struggle. Optimism will restart if BTC overcomes a critical hurdle and flips it into a foothold. In such a case, the pioneer crypto will be slated to push to a new all-time high (ATH). 

Read full analysis

BTC

ETH

XRP