Ethereum Leaves Bitcoin Behind, But Is This Rally Sustainable?
27 Février 2024 - 4:00AM
NEWSBTC
Ethereum has left Bitcoin in the dust with its latest rally towards
$3,100. Here’s whether this run is sustainable based on futures
market data. Ethereum Has Separated From Bitcoin With Over 7% Jump
In Past Week While Bitcoin has been in consolidation lately,
Ethereum appears to have been putting together bullish momentum
entirely of its own, as the asset has jumped more than 7% in the
past week. Related Reading: XRP Forms Buy Signal, Analyst Predicts
Surge To This Target The chart below shows how ETH has performed
during the last month. The price of the coin seems to have been
climbing recently | Source: ETHUSD on TradingView In the last 24
hours, Ethereum reached a peak of $3,130 level, a mark it only
reached for the first time since the first half of April 2022.
Since then, the coin has come down a bit, as it now floats around
$3,100. Nonetheless, despite this small retrace, ETH has still
performed notably better than the original cryptocurrency. Now, the
asset’s investors might be wondering if the coin could continue
this run. Perhaps data related to the futures market might shed
some light. ETH Funding Rates Have Been At Positive Levels Recently
As pointed out by an analyst in a CryptoQuant Quicktake post, the
ETH funding rate has had positive values recently. The “funding
rate” is an indicator that keeps track of the periodic fees that
traders on the futures market are exchanging between each other
right now. When the value of this metric is positive, it means that
the long holders are currently paying a premium to the short
investors to hold onto their holdings. Such a trend implies the
majority sentiment in the futures market is bullish. On the other
hand, the indicator being negative implies a bearish sentiment is
dominant in the sector right now as the short holders outweigh the
long traders. Now, here is a chart that shows the trend in the
30-day simple moving average (SMA) of the Ethereum funding rate
over the past couple of years: Looks like the value of the metric
has been heading up in recent days | Source: CryptoQuant As the
above graph shows, the 30-day SMA Ethereum funding rate had shot up
to extremely high levels in the first half of January.
Interestingly, this is when the market top due to the Bitcoin spot
ETFs occurred. After the price drawdown following the event, the
funding rate calmed as the longs that had piled up saw liquidation.
As the recent rally in the coin has occurred, the funding rate has
once again gone up. However, This time, the 30-day SMA Ethereum
funding rate isn’t quite at the extreme levels it was last month.
This could mean that the futures market isn’t yet too overheated.
Related Reading: SingularityNET (AGIX) Rallies 128% As On-Chain
Activity Heats Up Naturally, this could potentially allow for the
current Ethereum rally to go on for a while still. It should be
noted, though, that as the funding rates go higher, the chances of
a long squeeze taking place go up. Thus, while ETH may not be quite
at the same risk as last month, a long squeeze could still be on
the horizon, becoming more probable to happen as the speculators
continue to open up more positions. Featured image from Kanchanara
on Unsplash.com, CryptoQuant.com, chart from TradingView.com
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