Ethereum price resistance at $1,750 could reflect traders’ anxiety over the Shanghai upgrade

The terms of Ether (ETH) declined 9.8% betwixt Feb. 19 and Feb. 25 aft the terms absorption astatine $1,725 proved stronger than expected. Still, the correction was insufficient to interruption the 6-week-long ascending transmission and did not origin Ether derivatives metrics to crook bearish.

Ether (ETH) terms scale successful USD, 1-day. Source: TradingView

Ether's terms resilience tin beryllium partially explained by the operational nonaccomplishment of immoderate of its astute declaration blockchain competitors. For instance, Solana (SOL) faced a 20-hour-long outage connected Feb. 25, which was lone resolved aft a web upgrade coordinated by validators. The web restart besides progressive purging immoderate of the latest slots, though Solana developers said that "no confirmed idiosyncratic transactions were rolled backmost oregon impacted."

NEM (XEM) experienced a "chain halt" connected Feb. 27 that lasted for 15 hours, causing aggregate exchanges to halt deposits and withdrawals and developers promised to merchandise an update to forestall further misbehavior. Curiously, the latest station from the authoritative NEM relationship connected Twitter, excluding a Merry Christmas greeting, was a "Please Stand By" representation posted successful July 2022.

The regulatory situation remains shady for cryptocurrencies, and the latest victims were planetary outgo processing companies Visa and Mastercard. According to a Reuters study published connected Feb. 28, the firms are delaying the motorboat of caller partnerships with crypto firms until marketplace conditions amended and a much transparent regulatory model is established.

In much affirmative news, Ethereum's Sepolia testnet was successfully hard forked connected Feb. 28 successful mentation for the Shanghai upgrade. The much-anticipated mainnet update expected for March should yet let validators to retreat their staked Ether from the Beacon Chain. Developers are present prepping the Goerli testnet to participate a akin stage.

Let's look astatine Ether derivatives information to recognize if the $1,560 enactment retest connected Feb. 25 has impacted crypto investors' sentiment.

ETH futures amusement accrued request for leverage longs

The annualized two-month futures premium should commercialized betwixt 5% and 10% successful steadfast markets to screen costs and associated risks. However, erstwhile the declaration trades astatine a discount (backwardation) versus accepted spot markets, it shows a deficiency of assurance from traders and is deemed a bearish indicator.

Ether 2-month futures annualized premium. Source: Laevitas.ch

The illustration supra shows that derivatives traders became somewhat bullish arsenic the Ether futures premium (on average) flirted with the 5% threshold connected Feb. 26. More importantly, it shows resilience adjacent arsenic Ether terms declined by astir 10% betwixt Feb. 19 and Feb. 25.

The accrued request for leverage longs (bulls) does not needfully construe to an anticipation of affirmative terms action. Consequently, traders should analyse Ether's options markets to recognize however whales and marketplace makers are pricing the likelihood of aboriginal terms movements.

Options hazard metrics amusement resilience contempt a 10% terms slide

The 25% delta skew is simply a telling motion erstwhile marketplace makers and arbitrage desks are overcharging for upside oregon downside protection.

In carnivore markets, options investors springiness higher likelihood for a terms dump, causing the skew indicator to emergence supra 10%. On the different hand, bullish markets thin to thrust the skew metric beneath -10%, meaning the bearish enactment options are successful little demand.

Related: Vitalik Buterin says 'more inactive needs to beryllium done' implicit precocious Ethereum txn fees

Ether 60-day options 25% delta skew: Source: Laevitas.ch

The delta skew flirted with the bearish 9% level connected Feb. 27, signaling accent from nonrecreational traders. However, the concern improved connected Feb. 28 arsenic the scale moved to 5 — indicating a akin upside and downside hazard appetite.

It makes consciousness for cardinal analysts to debar adding bullish positions up of the Shanghai upgrade, particularly since Ethereum developers person a past of delaying important web changes.

Despite the scope of concerning factors, options and futures markets awesome that pro traders are conservatively bullish and spot that the ascending signifier volition hold. From a method investigation standpoint, investors look to judge that the bullish inclination volition proceed unless Ether breaks beneath the transmission enactment astatine $1,520.

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.

The views, thoughts and opinions expressed present are the authors’ unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.