Ethereum funding rates have turned positive, indicating bullish sentiment among futures traders.
Ethereum’s exchange data shows that ETH’s selling pressure is easing.
However, ETH failed to recover due to the drop in demand.
Ethereum [ETH] has underperformed Bitcoin [BTC] this year. The main reason behind this dismal performance is the decline in demand due to increased selling activity.
However, selling pressure may be about to run out. According to a Quicktake post by CryptoQuant, net ETH flows on derivatives exchanges exceeded 40,000 ETH on September 7.
The increase in the amount of ETH being withdrawn from derivatives exchanges suggests that selling pressure is declining and traders are less interested in borrowing funds to open short positions.
Spot market selling spree continues
While data from derivatives markets suggests that pessimism among Ethereum traders is waning, the same is not happening in spot markets.
The Ethereum Foundation continues to sell ETH, most recently offering $1 million worth of DAI SpotOnChain for every 450 ETH. In the past four days alone, the organization has sold $1.28 million worth of ETH tokens.
According to Lookonchain, Hong Kong-based crypto wealth management firm Metalpha has also deposited more than $54 million worth of ETH into Binance over the past three days.
Despite the sell-off, the amount of ETH deposited into spot exchanges is decreasing. On September 8, ETH’s exchange inflows reached 37,415 ETH, the lowest level since late July.
So while sellers remain active, sales momentum may be waning.
Ethereum Price Trends
At the time of writing, ETH is trading at $2,319, a slight increase of 0.6% over 24 hours.
On the daily chart, the altcoin is trading inside a descending channel while the Momentum Oscillator is negative, suggesting that bears remain in control.
However, after forming three consecutive green candles, ETH is attempting to break out to the upside. If a breakout occurs, it could signal a shift in momentum and the start of a rally.
However, for this breakout to occur, buyers need to overwhelm sellers. At press time, the relative strength index (RSI) was at 37, which suggests that ETH is in bearish territory.
The action of the RSI line indicates that sellers are exhausted as it attempts to cross over the signal line. If this crossover is confirmed, it will indicate a buy signal.
Ethereum’s funding rate also turned positive, indicating that futures traders remain optimistic despite the bearish sentiment.
