The largest altcoin Ethereum broke its weak performance against Bitcoin and left BTC behind after the Fed's interest rate cut.
According to the data, ETH has gained more than 16% in value since the FED made its first interest rate cut, while BTC has increased by approximately 6% in the same period.
This upward momentum in Ethereum coincides with a significant increase in the Ethereum rate, with analysts saying that this indicates that demand for long positions is strengthening and optimism among investors that the ETH price will rise is increasing.
Speaking to The Block, YouHodler market chief Ruslan Lienkha argued that the rise against BTC and the increase in funding rates indicate a bull market for Ethereum.
However, Lienkha noted that the Ethereum price is at risk of correction if investors’ optimism about ETH is overblown or external factors change.
“A positive funding rate for Ethereum reflects increasing demand for leveraged long positions and points to a bull market outlook.”
Stating that volatility tends to increase after the increase in funding rates in the cryptocurrency market, the analyst stated that he does not see the possibility of a long squeeze for ETH.
“Cryptocurrency funding rates are significantly more volatile than commodity markets. While Ethereum has seen significant funding rates increase, opening a short position in anticipation of a long squeeze for ETH seems very risky at the moment, in my view,” Lienkha said.
Ethereum, which has gained 16.3% in the last 7 days, continues to be traded at $2,655 at the time of writing.
*This is not investment advice.