Ethererum’s current funding rate, approximately 0.0056%, has returned to levels seen in September 2023, after which the ETH price has reached 166% in six months.
Ethereum ETH $4 477 24h volatility: 0.9% Market cap: $540.40 B Vol. 24h: $24.74 B price has been trading range bound between $2,200-$2,500 with no major catalyst in sight. However, if the ETH trader sentiment improves and gets a slight uptick, it could set the stage for Ethereum price recovery to $3,000 and eventually lead to a parabolic rally ahead.
In a note on September 12, CryptoQuant analyst Burak Kesmeci wrote: “We will wait for Ether’s funding rate to rise above 0.015 to see if the calm before the storm breaks”.
The Ethereum funding rate is a small market fee aligning the spot price and futures while stabilizing the perpetual contracts. A higher funding rate usually leads to stronger market optimism and shows that traders are willing to spend more to hold their positions longer. Speaking on the development, Kesmeci added:
“To see another parabolic rise in Ether, we need positive signals. The support from the futures market plays a significant role in such rallies.”
Ethererum’s current funding rate, approximately 0.0056%, has returned to levels seen in September 2023, according to market analyst Kesmeci. This comes after a surge in the rate to above 0.015% last year. Kesmeci emphasized that the funding rate reaching this point again is “crucial for tracking healthy increases during bull markets”, suggesting it may signal potential upward momentum for Ether.
Ethereum Historical Performance After Funding Rate Rise
Following the funding rate surge last year in September 2023, the Ethereum price surged more than 166% in the next six months reaching all the way above $4,006 in March, earlier this year.
Since Ethereum 2 earlier this month, the ETH price has not surged past $2,500 which has been a crucial price of traders. On the other hand, the ETH price has also underperformed Bitcoins over the past two months despite the launch of the spot Ether ETFs in July this year.
Futures traders are skeptical that ETH will reach this level in the near term. If it does, approximately $576.28 million in short positions could face liquidation, according to CoinGlass data. ETH reached its all-time high of $4,810 in September 2021, and TradingView data reveals its market dominance was about 3.78% higher than compared to its current level of 14.20%.
As reported by Coinspeaker, institutions still continue to remain bullish on Ethereum and believe that it needs better marketing and value proposition to garner more interest.
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