Ethereum price has continued its upward climb in the last seven days, sparking a similar movement in altcoins. The U.S. elections remain instrumental in general positive sentiment based on anticipated inflows to the crypto market. However, on-chain factors like funding rates have ignited bullish projections since coming close to the key threshold. Ethereum holders relish the status quo, pointing to new possibilities and setting projections above $3,500.
Analysts Expect Positive Run
Traditionally, funding rates are a determinant of present market direction. A new report from on-chain analytics firm CryptoQuant shows Ethereum funding rates approaching the 0.02 threshold. This critical point is linked to huge price gains in previous cycles. When the rate is above 0.02, positions are supported, and an incoming rally is likely.
“Sustainable bull rallies and robust price gains rely not only on spot purchases but also on long positions in the futures market. Data shows that bull rallies backed by futures trading provide investors with significantly larger opportunities. Therefore, if Ethereum Funding Rates remain above 0.02, this could be a promising sign for Ethereum and altcoin investors alike. New on-chain alerts are ready to stay updated by following these alerts in the preset alerts section,” the report added.
In July 2020, rates were over the threshold, and ETH prices moved up 100% within 50 days. In November 2020, the price surged 1000% in 350 days. Similarly, in August 2021, the price gained 90% in 100 days. Per the report, October 2023 saw the altcoin leader clinch a 150% boost in 150 days.
Institutional Investors Are Backing Ether
Institutional investors have been the backbone of the crypto market drive this year. The approval of spot Bitcoin ETFs in January created a new window of institutional investment. The successes of these products led to the creation of spot Ethereum ETFs and applications for Solana products. Although Ethereum ETFs were not as successful as Bitcoin products, the inflows lured a new wave of investors.
A Trump Presidency promises to introduce new crypto rules, springing up optimism in the markets. ETH price now trades above $3,000, coming closer to the bullish predictions made this week. The network continues to attract participants because of decentralized applications (dApps) in the ecosystem with an increasing asset under management (AUM).
