- ETH funding rates are at a record high.
- The demand for altcoins persists on the spot market.
Ethereum’s [ETH] The recent price rally over $3700 has coincided with an increase in funding rates on cryptocurrency exchanges. According to a pseudonymous cryptocurrency exchange, CryptoQuant analyst The price explosion of 2021 is a reflection of the current events.
If the futures funding rate of an asset is significantly positive and on the rise, this indicates that there is strong demand for long-term positions. This is a positive sign and can be a prelude to the continued growth of an asset.
ETH has seen its value increase by 59% within the last month. The altcoin reached its highest value since December 20, 21 at $3753 during the press time. CoinMarketCap’s data.
Data from Coinglass The recent increase in the value of the altcoin has led to its futures interest reaching a 27-month record. ETH’s current open interest is $12.2 billion. This represents a 71% increase in the past month.
Open interest of a coin increases when traders either open new positions or maintain existing ones. The market also experiences an increase in liquidity.
Positive funding rates and a rising open interest indicate a bullish trend. It indicates that the market is continuing to place bets on a rally.
This has risks. CryptoQuant analyst:
“However, while rising funding rates typically accompany a bullish market sentiment, excessively high values can be dangerous. Elevated rates increase the risk of long liquidation cascades, which may result in heightened market volatility and unexpected corrective movements.”
On the 5th of March, ETH climbed to above $3800 and then plummeted down to $3400. Coinglass data shows that long liquidations totaled $135m on this day.
The spot price of ETH
On the spot markets, ETH accumulation remained above sales. At the time of press, key momentum indicators for the coin were above their neutral lines. For example, ETH’s Relative Strength Index was 76.50 and its Money Flow Index was 80.16.
Read more Ethereum’s [ETH] Price Prediction 2024-25
At press time, the Awesome Oscillator (which helps measure market trends) showed a majority of green bars facing upwards.
When an asset’s Awesome Oscillator returns green, upward-facing bars in this manner, it suggests strengthening bullish momentum in the market.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
Source: ambcrypto.com