While the leading cryptocurrency Bitcoin fell to $59,000 after facing strong selling pressure at $69,000, Ethereum remained strong compared to BTC.
While BTC showed extremely volatile movements today, ETH continued its rise and $ 3,900 was exceeded.
Evaluating the rise in Ethereum, CryptoQuant analyst stated that ETH's recent rise was due to the increase in investor confidence and increased purchasing activity.
Pointing out that the funding rates in ETH are positive at this point, the analyst said that the rates have reached the levels of late 2020, when Ethereum was ready for a strong upward rally towards its all-time high.
Although funding rates indicate an increase for ETH, the analyst stated that an excessive rise in funding rates could be dangerous and lead to unexpected corrections.
The analyst advised investors to follow funding rates carefully and said:
“Positive funding rates indicate a bullish outlook, while negative rates indicate a bearish sentiment among traders.
Ethereum's funding rates, in particular, have seen a significant increase, reaching levels reminiscent of late 2020, when Ethereum was poised for a strong bullish rally towards a new all-time high.
This increase in funding rates signals a strong bullish sentiment among futures investors, potentially leading to a sustained rally.
However, while rising funding rates typically accompany bullish market sentiment, excessively high values can be dangerous.
Excessively high rates increase the risk of long positions being liquidated, which can lead to increased market volatility and unexpected corrective movements.
Therefore, investors should closely monitor funding rates amid Ethereum's bullish momentum and effectively manage risk to evaluate market conditions and anticipate potential price fluctuations.”
Is $ETH in the Same Condition as it was in 2021?
“#Ethereum's funding rates have seen a significant uptick, reaching levels reminiscent of late 2020 when Ethereum was poised for a robust bullish rally toward its all-time high.” – By @Greatest_Trader
Link 👇… pic.twitter.com/YtUpMWEm0x
— CryptoQuant.com (@cryptoquant_com) March 6, 2024
*This is not investment advice.
