Ethereum, the second-largest cryptocurrency by market capitalization, has struggled to reach the $3,000 price level since early August. Throughout September, Ethereum hovered mostly below $2,600. However, this week brought a glimmer of hope for investors when it finally broke above the $2,600 threshold.
With this resistance level now surpassed, the outlook suggests a potential continued surge towards the $3,000 price mark. An analysis on the CryptoQuant platform points to an emerging bullish trend in Ethereum’s funding rates as a key catalyst for this potential upward movement.
According to an ETH analysis on CryptoQuant by ShayanBTC, Ethereum’s 30-day moving average of funding rates has shown a slight but noticeable bullish shift after a prolonged period of decline. This change indicates renewed trader confidence in Ethereum’s price performance, especially following a recent interest rate cut by the Federal Reserve.
ETH funding rates are periodic payments made between traders to keep the price of perpetual futures contracts close to the spot price of the cryptocurrency. A positive shift in these funding rates often suggests that long positions are gaining dominance, which can apply upward pressure on prices. The analyst stressed the importance of these funding rates, particularly in anticipation of a bullish fourth quarter. For Ethereum to continue its recovery and aim for higher price levels, demand in the perpetual futures market must sustain and possibly rise in the coming weeks. Any decline in funding rates could potentially reverse this bullish momentum.
Ethereum’s recent breakthrough above $2,600 marks a significant shift in market sentiment. After weeks of trading below this price point, $2,600 now appears to be a vital support zone for the cryptocurrency. This breakout could pave the way for Ethereum to reclaim the $3,000 level, with the current funding rates playing a crucial role in this journey.
As of now, Ethereum is trading at $2,610, marking an 8% increase over the past seven days and a 20% increase from its low of $2,171 on September 6. This positive sentiment is also gaining traction among institutional investors, as reflected by inflows into Spot Ethereum ETFs. Initially, there was a net outflow of $79.3 million on Monday, but the subsequent days saw inflows of $62.5 million and $43.2 million on Tuesday and Wednesday, respectively. These inflows may significantly influence whether Ethereum can not only reach but sustain a price above $3,000 in the coming weeks.
