Ethereum appears to have seen a notable shift in its key metric. In particular, a recent report from CryptoQuant analyst Burak Kesmeci highlighted the potential significance of Ethereum’s current funding rates.
The analyst pointed out that similar trends in the past have been followed by substantial price increases, suggesting that Ethereum could be on the verge of another surge.
The calm before the storm?
Funding rates are a key indicator of the future market, indicating the balance between long and short positions. When the funding rate remains low for an extended period of time, it can signal indecision or calm in the market, but if the rate increases sharply, it often precedes a strong price movement.
According to Kesmeci’s report, Ethereum funding rates are hovering between 0.002 and 0.005, a relatively low level last seen in September 2023. The funding rate then rose above 0.015, followed by a price rally from $1,500 to over $4,000.
The analyst also looked at whether Ethereum’s September 2024 funding rate could signal a similar price move. The current low funding rates have been persisting for about a month, starting in August.
This situation mirrors the period leading up to last year’s sharp price rally. September and the last quarter have historically been pivotal periods for cryptocurrency markets, often seeing increased trading volume and price gains in late summer.
However, Kesmeci noted:
I can’t say if history will repeat itself, but there is certainly a pattern. We will wait for Ether’s funding rate to rise above 0.015 to see if the calm before the storm is lifting. A move above this level in funding rates is crucial to tracking healthy increases during bull markets.
How is Ethereum doing so far?
Although Ethereum has not seen any further decline since its low of $2,197 last month, the asset has not seen any major price increases in recent weeks.
Instead, ETH has continued to consolidate within a specific range. After an attempt to create a new all-time high in March, trading above $4,000, ETH has seen a steady decline since then and has remained below $3,000 since August.
So far, the asset has declined by 2.7% over the past few weeks and has also seen a 0.7% increase over the past 24 hours. However, the asset remains below the $3,000 mark, currently trading at $2,331 at the time of writing.
According to a recent article by renowned crypto analyst Alex Clay on X, ETH may have completed its correction. Clay noted that a “break above $2,500 would confirm the start of the rally.”
#ETH/USD
In my opinion, we are at the end of the $ETH correction
Looking for consolidation above key area + 200 MA and 200 EMA confluence
A break above $2,500 would serve as confirmation of the start of the rally.
#Ethereum turned out to be a heavyweight, so the $10,000 goal is pretty… pic.twitter.com/jjGPPUHWE3
— Alex Clay (@cryptclay) September 9, 2024
Featured image created with DALL-E, chart by TradingView
