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1 November 2024
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Ethereum Futures Show Positive Funding Rates Indicating Bullish Sentiment

Ethereum's recent performance in the futures market is generating optimism among traders and analysts, as noted by CryptoQuant analyst ShayanBTC.

As the second-largest cryptocurrency by market capitalization, Ethereum has gained attention due to an increase in funding rates, which measure the demand balance between buyers and sellers of futures contracts.

Rise In Funding Rates To Drive Breakout?

Positive funding rates indicate more aggressive buyers, suggesting bullish sentiment, while negative rates reflect more sellers and a bearish outlook. This trend indicates favorable market sentiment for Ethereum, though concerns exist regarding its sustainability.

Current positive funding rates have not yet reached levels seen earlier in 2023 when Ethereum experienced significant bullish momentum in March.

Ethereum funding rates.

This discrepancy may suggest that while sentiment is improving, further momentum is required for a sustained rally.

Shayan's observations indicate that for Ethereum to surpass key resistance levels and maintain an upward trend, higher funding rates are necessary to demonstrate increased buying interest and confidence among futures traders. The analyst stated:

For Ethereum to overcome key resistance levels and sustain an upward trajectory, a higher funding rate would signal increased buying interest and confidence from futures traders. Higher funding rates would not only confirm participants’ willingness to go long on Ethereum but would also add upward pressure on the price, potentially leading to a stronger and more sustained rally.

Ethereum Market Performance

Ethereum has shown a notable recovery in price recently, reaching $2,719 on Wednesday.

However, after this peak, a notable correction occurred, with ETH decreasing by 5.1% over the past day.

Ethereum (ETH) price chart on TradingView

Currently, the asset trades at $2,550, down from a 24-hour low of $2,548. ETH’s daily trading volume has also declined from above $24 billion to below $20 billion. Despite this performance, some analysts maintain a bullish stance on ETH.

Notably, crypto analyst Javon Marks highlighted that Ethereum is exhibiting “confirmed Hidden Bull Divergence patterns and an RSI breakout,” projecting a price increase of 75% towards a target of $4,811.6.

Featured image created with DALL-E, Chart from TradingView