Ethereum Funding Rates Point To Bullish Momentum, New ETH High Soon? (CryptoQuant)

Ether (ETH) has been on a positive trajectory over the past week, with network dynamics showing some improvement. Crypto market analysts say there is still room for growth.

According to a report by CryptoQuant analyst Shayan, Ethereum futures market funding rates indicate that ETH has not entered an overheating phase. Therefore, the cryptocurrency may post additional gains in the coming weeks.

ETH sees positive momentum

ETH hit a six-month high on November 28, reaching $3,700, a level last seen in early June. This $3,680 increase led to an 18% weekly gain for the second largest cryptocurrency; however, the asset had returned to $3,540 at the time of writing, posting a weekly gain of 5%.

Shayan said that ether’s recovery and rise above significant resistance levels rekindled investor optimism and sparked discussions in the community about a new all-time high by the end of the year. Interestingly, funding rates, which reflect investor sentiment in the futures market, suggest that ETH could reach a new high by the end of 2024. This metric also highlights the potential for near-term risks.

Rising Ethereum Funding Rates Reveal Greater Demand for Long ETH Positions; however, they remain below the levels recorded when ETH reached its all-time high of $4,890 three years ago. This shows that the cryptocurrency is not yet overvalued and does not face the risk of a major correction.

“Historically, sharp spikes in funding rates often precede sudden market corrections or liquidation cascades, leading to periods of increased volatility. However, current funding rate levels imply that there is still room for further growth in both price and sentiment before these risks become critical,” Shayan said.

Ethereum Price Outlook

Earlier this week, a CryptoPotato ETH price analysis report stated that ETH breaking the $3,500 resistance level could be the start of a significant rally. However, the cryptocurrency still faces the possibility of continuing its consolidation phase.

While Ether saw a significant rise above $3,500 on Wednesday, the cryptocurrency has remained above that level since then, falling 4% from $3,680. This indicates that ETH is currently consolidating. It remains to be seen whether the coin will continue to consolidate or move higher, driven by flows into the local US Ethereum exchange-traded fund market.

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