Analyst Suggests Potential for ETH Price Rise
An analyst has pointed out that the recent cooldown in the Ethereum futures market could indicate the possibility of a price increase for ETH. The funding rates for Ethereum have experienced a decline from their previously high levels. Funding rates refer to the fees that futures contract holders on derivative platforms exchange with each other.
Bullish and Bearish Sentiment in the Futures Market
A positive funding rate suggests a bullish sentiment, indicating that long contract holders are paying a premium to hold onto their positions. Conversely, a negative funding rate indicates a bearish sentiment, with short traders overwhelming the longs.
Potential for Long Squeeze
A “long squeeze” occurs when a rapid drawdown triggers a cascade of liquidations on the long side of the market. The side of the futures market dominated by traders is more susceptible to a squeeze. However, as Ethereum undergoes its correction, the funding rates have decreased. While still positive, they no longer suggest an overheated market and reduce the risk of a long squeeze.
Resuming Upward Trajectory
With the completion of the ongoing correction stage, there is potential for Ethereum’s price to resume its upward trajectory.
ETH Price Decline
Ethereum’s price has fallen below $2,400, experiencing a 5% decline over the past week.
Hot Take: Analyst Predicts Resumption of ETH Price Increase
An analyst has noted that the cooldown in Ethereum’s futures market funding rates could lead to a potential resumption of the cryptocurrency’s price rise. This decline in funding rates suggests a decrease in overheating within the market and reduces the likelihood of a long squeeze event. As Ethereum undergoes a correction phase, there is an opportunity for its price to continue its upward trajectory. However, it is worth noting that Ethereum’s price has recently experienced a decline, falling below $2,400.
Newt Bettec emerges as an intellectual voyager at the intersection of crypto analysis, meticulous research, and editorial mastery. Within the digital labyrinth of cryptocurrencies, Newt’s intellect traverses intricate corridors, resonating with seekers of diverse inclinations. His talent for unraveling complex threads of crypto intricacies seamlessly blends with his editorial finesse, transmuting intricacy into an engaging tapestry of understanding.