Ether has outperformed the world’s most popular cryptocurrency in the last seven days. It gained 17.64% while BTC gained 13.02% in value. This is attributed to investors being pulled towards the Ethereum network transition to proof-of-stake (PoS) consensus. They see it as a bullish catalyst.
And there is the much-awaited Merge as well. Ethereum developers say the final trial on the Goerli test network is expected in July before the mainnet gets the green light for its upgrade. Moreover, Ethereum’s total value locked (TVL) has increased following Terra’s ecosystem collapse in mid-May. Analysts say the flight-to-quality in the DeFi industry benefitted Ethereum because of its robust security and battle-tested applications.
Ethereum currently holds a 57% market share of TVL, as per data from DeFi Llama, up from 51% on April 8. But the current $35 billion in deposits on the Ethereum network’s smart contracts seem small – this is compared to the $100 billion in December 2021. A drop in the median transfer fees or gas costs supports the decrease in Dapp use on Ethereum. It’s stated to be the lowest since mid-December 2020 when the network’s TVL stood at $13 billion.
Traders should look at Ether’s derivatives market data to understand how whales and market makers are positioned. For Ether’s price to rally, the skew indicator should move -12% or lower. A skew above 12% indicates a reluctance to take bearish strategies; this is typical of bear markets. On July 7, the skew indicator briefly touched the neutral-to-bearish range as ETH completed a 19% rally in four days. But options traders took on a more conservative approach. This means the higher the index, the traders are less inclined to price downside risk.