Ethereum Faces Crucial Test As Funding Rates Decline And $3K Level Looms
Despite the recent bullishness in the cryptocurrency market overall, Ethereum is undoubtedly still under pressure as it struggles to make any significant upward moves.
the latest one analyze By: CryptoQuant QuickTake platform contributor ShayanBTC reveals key factors Impact on Ethereum’s performance.
In a post titled “Ethereum faces a crossroads: Financing rates and $3,000 support are key to sustaining bullish momentum,” Shayan highlighted the asset’s struggles in maintaining its upward trajectory.
The Importance of Funding Rates and the $3,000 Support Level
Shayan said Ethereum’s bullish momentum is severely challenged by fluctuations in funding rates, a key indicator of demand in the derivatives market.
While these rates initially rose during the cryptocurrency market’s recent rally, signaling growing confidence, rates subsequently dropped following Ethereum’s rejection $4,000 resistance Indicates reduced interest and commitment on the part of traders.
Notably, the spike in funding rates during the rally suggests traders are cautiously optimistic. However, the subsequent sharp decline in these rates highlighted the weakening demand for Ethereum in the derivatives market.
This shift raises concerns about the sustainability of the bullish trend, especially considering Ethereum’s inability to break above the $4,000 resistance.
this $3,000 support It has become a key threshold for Ethereum. Shayan emphasized that maintaining this level is crucial to stabilize the market and potentially reignite bullish momentum.
Failure to hold above $3,000 could trigger greater selling pressure, leading to a further market correction. The analyst wrote:
Overall, Ethereum’s outlook hinges on reclaiming higher funding rates and defending $3,000. These factors will determine whether the market resumes its upward trend or faces further corrections.
Ethereum market performance
Meanwhile, Ethereum continues to trend downward, especially as the broader market has recently turned bearish. Ethereum’s market value fell 6.2% in the past week Bringing the price to under $3,500.
However, the price of ETH has seen slight gains over the past day, rising by 0.9%. This slight increase has pushed ETH price to hover above $3,200 at the time of writing, down 33.9% from the all-time high of $4,878 set in November 2021.
Interestingly, while the price of ETH has fallen over the past week, the asset’s daily trading volume has shown the opposite trend over the same period. In particular, ETH’s daily trading volume has increased from $20 billion last Friday to over $26 billion today.
Considering ETH’s current trend, it’s worth noting Increased trading volume It could be the result of continued buying pressure and surge in selling pressure in the Ethereum market.
Featured image created using DALL-E. Charts from TradingView
