Cryptocurrency analytics firm CryptoQuant has highlighted Ethereum’s recent price rally, noting that there is a growing sense of optimism among investors as the ETH price has broken through key resistance levels.
Ethereum’s price action has reignited discussions about a possible new all-time high (ATH) before the end of the year, according to CryptoQuant. The rise in funding rates, a key indicator of market sentiment, suggests increased demand for long positions as traders bet on Ethereum’s continued upward momentum.
While funding rates have increased significantly in recent weeks, CryptoQuant noted that they remain below levels observed during Ethereum’s previous ATH of $4,900. This suggests that while the current rally is gaining strength, it has not yet reached an overheated state. This balance provides room for bullish sentiment to be maintained without triggering the risk of further price appreciation and a sudden correction in the market, the analyst firm said.
Despite the positive outlook, CryptoQuant noted the potential risks associated with funding rate hikes. Historically, sharp increases in these rates have often been preceded by periods of high volatility, including abrupt corrections or liquidation steps. Such events can lead to short-term market disruptions, even amid broader bullish trends.
“While current levels suggest room for growth, traders should remain vigilant,” CryptoQuant warned, adding: “Increases in funding rates can quickly become warning signs of an overheated market, making risk management essential.”
*This is not investment advice.
