Amid the widespread decline in the global crypto market, Ethereum has emerged as one of the major cryptocurrencies that has been significantly affected.
Despite already underperforming in Recent bull runEthereum has now experienced a significant correction, falling below the $3,500 price level in recent weeks.
While this price performance from ETH has caused investors to lose interest in Ethereum for now, recent data from the CryptoQuant platform suggests a potential turnaround, Key indicators point to renewed market confidence.
Funding rates reflect renewed confidence among traders
A CryptoQuant analyst, ShayanBTC, recently highlighted the evolution of Ethereum’s futures market. analysis Title “Ethereum Futures Market Signals Possible Rebound After $3K Correction.”
Shayan’s analysis shows that futures funding rates, which act as a sentiment gauge for traders, have shown Signs of stability After the price decline, hint at a possible recovery.
According to analysts, Ethereum funding rates have shown an increase after the recent sharp correction, which indicates a high appetite among traders for long positions.
Specifically, funding rates are a mechanism in perpetual futures contracts where traders holding long positions pay short sellers depending on market sentiment, or vice versa. When funding rates rise, it usually suggests traders are leaning towards a bullish outlook.
Shayan revealed that the increase in funding rates indicates increased demand for Ethereum at its current price level, indicating that traders Expect a bounce-back From the $3,000 region.
The analyst added that such behavior often precedes significant upward price moves, especially when a Period of market consolidation. In his words:
The recent rise in funding rates indicates an influx of buyers, which, if sustained, could lead to a significant bullish rebound. This new buying pressure has the potential to push Ethereum towards the crucial $4K resistance in the short to mid-term.
Ethereum market performance
After weeks of continuous decline, Ethereum currently trades at a price of $3,310, down by 1.5% over the past day at the time of writing. This market value represents a decline of 32.2% from its all-time high (ATH) of $4,878 recorded in November 2021.
Interestingly, despite the drop in ETH’s price, the asset still managed to see a slight increase in trading volume over the past day.
Notably, as of this time yesterday, ETH’s daily trading volume stood at just under $15 billion, however, at the time of writing, the asset’s daily trading volume sits at $20.6 billion.
Featured image created with DALL-E, chart from TradingView
