Ethereum is facing challenges as Funding Rates, a key indicator of demand in the derivatives market, show mixed signals. Although it surged strongly during the price increase, the drop after being rejected at the $4K resistance level indicates traders' commitment is waning.

Initially, the rise in Funding Rates reflected cautious optimism. However, the subsequent sharp decline suggests decreasing demand, undermining Ethereum's bullish momentum. Maintaining the $3K support level is crucial for stabilizing the market and restoring bullish momentum. If this level is not held, it could lead to significant sell-offs and deeper corrections.

The future of Ethereum depends on regaining higher Funding Rates and defending the $3K level. This will determine whether the market continues its upward trend or faces further corrections.