Ethereum now appears to have seen a notable shift in key metrics. In particular, CryptoQuant analyst Burak Kesmeci recently highlighted the potential significance of Ethereum’s current funding rate.
The analyst noted that similar patterns have followed in the past, suggesting that Ethereum is on the verge of a new surge.
The calm before the storm?
The funding ratio is a key futures market indicator that shows the balance between long and short positions. A low funding ratio over a long period of time can indicate market indecision or calm, but a sharp rise in the ratio often precedes strong price movements.
According to Kesmeci’s report, Ethereum’s funding rate has been fluctuating between 0.002 and 0.005, which is the lowest it has been since September 2023. The funding rate has since surged above 0.015, which has led to a price rally from $1,500 to over $4,000.
The analyst further explored whether Ethereum’s funding ratio in September 2024 could show similar price movements. The current low funding ratio has been in place since August and has lasted for about a month.
This situation mirrors the period before last year’s significant price surge. September and the last quarter have historically been important periods for the cryptocurrency market, with volumes increasing and prices often rising as the summer ends.
However, Kesmeci noted:
It is hard to say if history will repeat itself, but there is certainly a rhythm. I would wait until Ether’s funding rate rises above 0.015 to see if the calm before the storm is broken. A funding rate above this level is important to track healthy increases during a bull market.
How is Ethereum doing so far?
Ethereum hasn’t shown any further declines since its low of $2,197 last month, but it hasn’t seen any significant price gains in the past few weeks.
Instead, ETH has continued to consolidate within a certain range. After attempting to make a new all-time high in March, trading above $4,000, ETH has been in a steady downtrend since then and has remained below $3,000 since August.
So far, the asset has fallen 2.7% over the past few weeks and is up 0.7% over the past 24 hours. However, the asset is still hovering below $3,000, trading at $2,331 at the time of writing.
According to a recent post by renowned crypto analyst Alex Clay on X, ETH may have completed its correction. “A break above $2500 would confirm the start of a rally,” Clay said.
#Ethereum/US dollar
I think we’ve reached the end $Ethereum correction
Key areas + Looking for some consolidation above 200 MA and 200 EMA confluence.
A break above $2500 would confirm the start of a rally.
#Ethereum The $10k target is rather… because it has turned into a heavy asset. pic.twitter.com/jjGPPUHWE3
— Alex Clay (@cryptclay) September 9, 2024
Featured image made with DALL-E, charts from TradingView