ethereum's recent performance in the futures market is generating optimism among traders and analysts, according to ethereum-Futures-Positive-Funding-Rates-Signal-Grow” target=”_blank”>perspectives shared by CryptoQuant analyst 'ShayanBTC'.
As the second-largest cryptocurrency by market capitalization, ethereum has attracted notable attention following a rise in funding rates, a measure used to gauge the balance of demand between buyers and sellers in futures contracts.
Raising financing rates to fuel the breakup?
Positive financing rates imply more aggressive buyers, indicating bullish sentiment, while negative rates suggest more sellers and a bearish outlook. This trend reflects favorable market sentiment for ethereum, albeit with some caution regarding its sustainability.
Despite this renewed optimism, the current positive funding rates for ethereum, as Shayan highlighted, have yet to reach the levels seen in early 2023, when the cryptocurrency experienced a sharp bullish trend in March.
<img src="https://technicalterrence.com/wp-content/uploads/2024/11/Ethereum-Futures-Show-Signs-of-Optimism-Will-Positive-Funding-Rates.png" alt="ethereum funding rates.” />
This difference may indicate that although sentiment is changing, momentum may need to be further strengthened to initiate a sustained rally.
Shayan's observations suggest that while traders are leaning towards a positive outlook on ethereum, this sentiment needs to translate into higher funding rates to indicate stronger conviction in the asset's potential price rise. The analyst wrote:
For ethereum to overcome key resistance levels and maintain an upward trajectory, a higher funding rate would indicate greater buying interest and confidence from futures traders. Higher funding rates would not only confirm participants' willingness to invest in ethereum, but would also add upward pressure on the price, which could lead to a stronger and more sustained rally.
ethereum Market Performance
ethereum has seen a notable recovery in price in recent weeks. The asset has seen a price rally to $2,719 on Wednesday.
However, after the asset reaches this price, a notable correction occurs. Over the past day, eth declined by 5.1%, losing some of the gains from the past few days.
x/9bsrAJHu/” alt=”ethereum (eth) Price Chart on TradingView” />
At the time of writing, the asset is trading at $2,550 from its 24-hour low of $2,548. eth's daily trading volume has also followed the same trend, falling from over $24 billion on Wednesday to under $20 billion. Regardless of this performance, some analysts remain bullish on eth.
For example, renowned crypto analyst Javon Marks recently x.com/JavonTM1/status/1851629949100118046″ target=”_blank”>highlighted that ethereum is breaking out of “confirmed hidden bullish divergence patterns and an RSI breakout,” sending its price up 75% to hit the $4,811.6 target.
<blockquote class="twitter-tweet”>
twitter.com/search?q=%24ETH&src=ctag&ref_src=twsrc%5Etfw” target=”_blank”>$eth
With prices up around +120% since breaking out, it looks like a run is already in effect, so another +75% move into… https://t.co/qa7K8qGBT4 pic.twitter.com/PrPDxfPzPa
— JAVONBRANDS (@JavonTM1) twitter.com/JavonTM1/status/1851629949100118046?ref_src=twsrc%5Etfw” target=”_blank”>October 30, 2024
Featured image created with DALL-E, TradingView chart
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