Ethereum traders turn bullish as ETH prices dip below $3K.

The price of Ether (ETH) fell below $3,000 for the first time in 50 days. Traders now fear that the crypto bull run is over, and despite the upcoming launch of an Ethereum exchange-traded fund (ETF) somewhere in the United States, some are worried that the price of ether may continue to fall.

Ether's fall below $3,000 just followed the crypto market's correction.

In the year On July 5, total market capitalization fell below $2 trillion, a level not seen since February 26. Ether's 18 percent drop from $3,450 to $2,815 simply mirrored the sector's 16 percent decline in three days. In general, the sentiment towards cryptocurrencies is getting worse. Analysts suggest that this decline was triggered by increasing selling pressure on Bitcoin.

On July 7, the Mt. Gox bankruptcy estate transferred 47,229 bitcoins worth $2.6 billion to a new address. This step is part of the process to start paying creditors, as some of the bitcoins have been sent to the Bitbank exchange's hot wallet. This has raised concerns about the negative impact on the price of BTC, because these coins have been locked up for more than a decade, and could have a selling pressure of up to $4.5 billion.

Adding to this pressure, the German government has moved 7,583 BTC to the exchange since June 19, amounting to $415 million. Shockingly, the total coins seized by the German authorities are 42,274 BTC, worth more than 2 billion dollars. The fear, uncertainty, and doubt (FUD) fueled by these large trades led to $936 million in long positions being exercised over three days, including $235 million in Ether futures.

Traders are concerned that the 2024 cryptocurrency bull run may be over, especially as this fall coincides with the S&P 500 index hitting a new high on July 5. The stock market responded positively to the US announcement of an increase in the unemployment rate in June. 4.1% A weak economy encourages interest rate cuts by the central bank, reducing the appeal of fixed income investments.

Measurements of ether derivatives do not show severe inhibition.

Although the situation favors risk assets, Ether and other cryptocurrencies have not been able to sustain their momentum. Some market participants believe that the launch of the Ethereum ETF in the United States could positively affect the price of Ether, but predicting the potential flow is ineffective, especially given the current investor interest in the sector. In these conditions, traders of Ether are becoming less optimistic, as evidenced by the parameters of the derivatives.

In independent markets, monthly Ether futures contracts trade at a 5%–10% premium compared to ETH spot markets to compensate for longer settlement times.

Data shows that the annual ETH futures premium fell to 8% on July 5, down from 11% a week ago. Although this level is not particularly alarming, it is worth noting that traders are still expecting some positive effects from the upcoming Ether ETF launch.

Related: How a U.S. Labor Market Slump Could Boost Bitcoin Prices

It is useful to analyze the Ether options market to assess the increase in hedging demand following the recent price correction. Usually, if traders anticipate a price decrease, the skew scale of ETH options increases by more than 7%. Conversely, periods of brilliance are often indicated by a skew of less than -7%.

Ether options skew remained relatively stable last week at -5%. Moreover, the last entry was on June 26, indicating that neutral sentiment has dominated for more than a week. On the positive side, there wasn't too much demand for downside protection when the price of Ether fell below $3,000.

Even with a 15% correction, the ether extracts showed relative strength. This does not mean that ETH will quickly return to the $3,300 support level, but professional traders are not preparing for further declines or rushing to prevent further price declines.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.