Ethereum failed to return to the $4K mark, causing significant liquidations in the futures market and a rapid decline that cooled market sentiment.

The chart shows the funding rate metric, which is a reliable indicator of futures market sentiment. While rates rose sharply last week, the rejection at $4K led to significant liquidations, returning rates to levels favorable for growth.

This cooling effect could pave the way for more sustained growth in the coming weeks. A similar situation was observed in January 2024, when a sharp rate cut calmed the market, setting the stage for Ethereum’s next major bullish rally. Historical precedent hints at the possible start of a new bullish phase.