Ethereum price drops to $3800 after resistance struggle
Ethereum’s (CRYPTO:ETH) price dropped to $3,800 on December 9 after failing to breach the $4,050 resistance level, which has held firm since December 2021.
The 5% decline raised questions about the sustainability of Ethereum’s bullish trend, especially as Bitcoin (CRYPTO:BTC) edges closer to $100,000.
Investor concerns have grown due to record-high inflows into Ether exchange-traded funds (ETFs), which failed to drive a break above the multi-year resistance.
According to futures data, however, professional traders appear unaffected, showing no indication of anticipating further price declines.
The annualised premium for Ether futures remains at 17%, significantly above the 10% neutral benchmark, reflecting increased demand for ETH leverage.
This may be driven by arbitrage opportunities in perpetual contracts, also known as inverse swaps.
Meanwhile, the funding rate for Ether perpetual futures currently stands at 2.7% monthly, slightly exceeding the 2.1% neutral threshold, with a peak of 5.4% observed on December 5.
Ether ETFs recorded $1.17 billion in inflows since November 29, bolstered by a 24% surge in Ethereum network activity.
The average transaction fee remains manageable at $7.50.
Ethereum has narrowed the gap with Solana (CRYPTO:SOL) in decentralised application (DApp) volumes, reaching $24.2 billion over seven days.
Including layer-2 scaling solutions like Arbitrum (CRYPTO:ARB), Base, Polygon (CRYPTO:MATIC), and Optimism (CRYPTO:OP), Ethereum’s combined volume rose to $48.6 billion—65% higher than Solana’s $29.5 billion.
Ether options markets have shown neutrality, with the 25% delta skew moving to -2% from -7% earlier in the week.
This indicates that traders have not shifted to a bearish outlook despite Ethereum’s recent decline.
The price drop appears linked to broader macroeconomic concerns.
Investor sentiment was likely affected by Nvidia’s monopoly investigation and China’s inflation data, which showed a 0.6% month-on-month decline in November.
At the time of reporting, the Ethereum price was $3,768.39.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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