An analyst has explained that the latest cooldown in the Ethereum futures market could suggest there is potential for a price rise to resume for ETH.
Ethereum Funding Rates Have Seen A Decline Recently
An analyst in a CryptoQuant Quicktake post explained that the ETH funding rates have seen a cooldown from their previously overheated levels. The “funding rate” refers to the periodic fees that futures contract holders on derivative platforms currently exchange with each other.
When the value of this metric is positive, it means that the long contract holders are paying a premium to the shorts to hold onto their positions. Such a trend implies that most traders share a bullish sentiment right now.
On the other hand, the under zero indicates that a bearish sentiment is currently dominant in the futures market, as the short traders are overwhelming the longs.
Now, here is a chart that shows the trend in the Ethereum funding rates over the last few months:
The value of the metric seems to have been low in recent days | Source: CryptoQuant
As displayed in the above graph, the Ethereum funding rates have been mostly positive during the last few months, implying that traders on the futures side of the market have mostly been bullish about the asset.
The few times that the metric did dip into the negative inside this period didn’t turn out to be anything major, as the indicator only attained low red values and rebounded back inside the green territory without too much wait.
The chart shows that during some phases of this lasting period of bullish sentiment, the metric attained particularly high values. “However, it’s crucial to note that elevated values in funding rates raise concerns about a potential overheated state in the perpetual markets, signaling the possibility of an impending long-squeeze event,” notes the quant.
A “squeeze” is an event in which a sharp swing in the price triggers a large number of liquidations, which in turn feed into this price move, elongating it and causing further liquidations.
When such a cascade of liquidations affects the long side of the market (that is, the price move in question is a rapid drawdown), the event is known as a “long squeeze.”
Generally, the side of the futures market most heavily dominated by traders is likelier to fall prey to a squeeze. Thus, when the funding rates are highly positive, a long squeeze can be more probable.
Recently, though, as Ethereum has gone through its latest correction, so have the funding rates. Although they are still positive, their magnitude may no longer be associated with an overheated market, and the risk of a long squeeze would have thus fallen.
“Consequently, there exists the potential for the price to resume its upward trajectory following the completion of the ongoing correction stage,” explains the analyst.
ETH Price
Ethereum has declined by around 5% during the past week as its price has now fallen under $2,400.
Looks like the price of the coin has been sliding off recently | Source: ETHUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
An analyst has explained that the latest cooldown in the Ethereum futures market could suggest there is potential for a price rise to resume for ETH.
Ethereum Funding Rates Have Seen A Decline Recently
An analyst in a CryptoQuant Quicktake post explained that the ETH funding rates have seen a cooldown from their previously overheated levels. The “funding rate” refers to the periodic fees that futures contract holders on derivative platforms currently exchange with each other.
When the value of this metric is positive, it means that the long contract holders are paying a premium to the shorts to hold onto their positions. Such a trend implies that most traders share a bullish sentiment right now.
On the other hand, the under zero indicates that a bearish sentiment is currently dominant in the futures market, as the short traders are overwhelming the longs.
Now, here is a chart that shows the trend in the Ethereum funding rates over the last few months:
The value of the metric seems to have been low in recent days | Source: CryptoQuant
As displayed in the above graph, the Ethereum funding rates have been mostly positive during the last few months, implying that traders on the futures side of the market have mostly been bullish about the asset.
The few times that the metric did dip into the negative inside this period didn’t turn out to be anything major, as the indicator only attained low red values and rebounded back inside the green territory without too much wait.
The chart shows that during some phases of this lasting period of bullish sentiment, the metric attained particularly high values. “However, it’s crucial to note that elevated values in funding rates raise concerns about a potential overheated state in the perpetual markets, signaling the possibility of an impending long-squeeze event,” notes the quant.
A “squeeze” is an event in which a sharp swing in the price triggers a large number of liquidations, which in turn feed into this price move, elongating it and causing further liquidations.
When such a cascade of liquidations affects the long side of the market (that is, the price move in question is a rapid drawdown), the event is known as a “long squeeze.”
Generally, the side of the futures market most heavily dominated by traders is likelier to fall prey to a squeeze. Thus, when the funding rates are highly positive, a long squeeze can be more probable.
Recently, though, as Ethereum has gone through its latest correction, so have the funding rates. Although they are still positive, their magnitude may no longer be associated with an overheated market, and the risk of a long squeeze would have thus fallen.
“Consequently, there exists the potential for the price to resume its upward trajectory following the completion of the ongoing correction stage,” explains the analyst.
ETH Price
Ethereum has declined by around 5% during the past week as its price has now fallen under $2,400.
Looks like the price of the coin has been sliding off recently | Source: ETHUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
![[Latest] North America Safety I/O Modules Market Insights: Key Drivers of Growth and Change](https://coininsights.com/wp-content/uploads/2025/03/L316986664_g-120x86.jpg)
can you buy generic clomid for sale get generic clomid for sale can i get generic clomiphene without rx can i buy generic clomiphene no prescription clomiphene medication cheap clomid without insurance can i order generic clomiphene without rx
Thanks on putting this up. It’s okay done.
The reconditeness in this piece is exceptional.
buy generic rybelsus over the counter – periactin 4 mg pills order generic cyproheptadine 4 mg
buy motilium sale – flexeril ca flexeril oral
augmentin 375mg uk – https://atbioinfo.com/ buy acillin tablets
nexium 40mg over the counter – https://anexamate.com/ buy nexium 20mg online cheap
purchase coumadin without prescription – https://coumamide.com/ losartan order
mobic 7.5mg canada – https://moboxsin.com/ order generic meloxicam 15mg
medicine for impotence – fast ed to take over the counter ed pills
order amoxicillin sale – https://combamoxi.com/ amoxil uk
fluconazole 200mg ca – https://gpdifluca.com/ order forcan sale
order cenforce online cheap – cenforcers.com cenforce 100mg price
shelf life of liquid tadalafil – ciltad generic best price on generic cialis
order zantac online cheap – aranitidine order ranitidine 150mg sale
tadalafil generic headache nausea – tadalafil daily use online cialis
The thoroughness in this break down is noteworthy. https://gnolvade.com/es/fildena/
best site order viagra – https://strongvpls.com/# cheap viagra 50mg
Thanks on sharing. It’s first quality. gabapentin uk
The vividness in this tune is exceptional. https://ursxdol.com/levitra-vardenafil-online/
With thanks. Loads of expertise! https://prohnrg.com/
More peace pieces like this would create the web better. https://aranitidine.com/fr/acheter-propecia-en-ligne/
This website absolutely has all of the tidings and facts I needed adjacent to this participant and didn’t know who to ask. https://ondactone.com/product/domperidone/
Thanks on putting this up. It’s well done.
coumadin pills
Thanks for sharing. It’s first quality. https://shemakestherules.com/proxy.php?link=https://roomstyler.com/users/adipe
Greetings! Very productive recommendation within this article! It’s the little changes which choice espy the largest changes. Thanks a portion for sharing! http://www.dbgjjs.com/home.php?mod=space&uid=531850
order dapagliflozin 10 mg online cheap – https://janozin.com/ buy generic forxiga 10mg
buy xenical generic – site orlistat 60mg cheap
Good blog you possess here.. It’s severely to espy high status script like yours these days. I truly comprehend individuals like you! Take vigilance!! http://www.dbgjjs.com/home.php?mod=space&uid=532996