Ethereum's ongoing rally has reignited investor optimism, with the price breaking through significant resistance levels and sparking discussions of a new all-time high by year’s end. A closer look at the futures market, specifically funding rates, sheds light on market sentiment and potential short-term risks.
Funding rates, a key metric that reflects sentiment in the futures market, have shown a significant uptick in recent weeks. This trend highlights increasing bullish momentum among investors and traders as Ethereum’s price surges.
While the rising funding rates indicate heightened demand for long positions, they remain below the levels seen during Ethereum's previous ATH of $4.9K. This suggests that while the market is gaining bullish momentum, it has not yet entered an overheated state.
Historically, sharp spikes in funding rates often precede sudden market corrections or liquidation cascades, leading to periods of heightened volatility. However, the current funding rate levels imply that there is still room for further growth in both price and sentiment before such risks become critical.
Written by ShayanBTC
