Ethereum Funding Rates sit at a 14-month low.
CryptoQuant analyst Maartun in a Quicktake on Sunday, reveals that Ethereum’s Funding Rates are at a 14-month low, noting that the last time it was this low, there was a huge short-squeeze in the markets.
“… Funding Rates are at a 14-month low.
The last time Funding Rates were this negative was in July ’21 just before a huge short-squeeze on Bitcoin & Ethereum,” the analyst writes.
Maartun explained that the low funding rates result from short-traders paying long-traders. But, according to Maartun, it could also be the result of traders hedging their spot positions as The Merge approaches.
As The Crypto Basic reported last Thursday, Santiment Feed revealed that short sellers appear to circulate on exchanges as The Merge approaches. These sellers could get caught in the short-squeeze if history repeats itself.
Meanwhile, in a tweet today, market analyst Ali Martinez noted that Ethereum would likely move lower to the $1,335 price point. According to Martinez, the asset is already trading below two significant supply zones. The first at $1,560, where 526K addresses bought 3.44 million ETH, and the second at $1,475, where 585K addresses bought 2.81 million ETH.
#Ethereum trades below two significant supply zones. One at $1,475, where 585K addresses bought 2.81 million $ETH, and another at $1,560, where 526K addresses hold 3.44 million #ETH.
The only considerable support level is $1,335, where 412K addresses purchased 2.2 million #ETH. pic.twitter.com/0VZgClekgN
— Ali Martinez (@ali_charts) August 29, 2022
In an earlier tweet, Martinez explained that Ethereum could be headed for a steep correction. Martinez noted that Ethereum’s network growth is at its lowest since March 2020, noting that a decline in network growth historically leads to a steep price correction.
#Ethereum network growth hasn’t been this low in more than two years. The last time the # of daily new $ETH addresses was 49,700 was back in March 2020.
A steady decline in the # of new addresses created on the #ETH blockchain tends to lead to a steep price correction over time. pic.twitter.com/u1zdwbbyH8
— Ali Martinez (@ali_charts) August 29, 2022
Notably, the excitement surrounding the Ethereum Merge upgrade that will see the network move to the proof-of-stake (PoS) consensus mechanism has not made the asset price resistant to macroeconomic factors. For example, following Fed chair Jerome Powell’s speech last weekend, the asset plunged by 10% to trade below $1,500.
It bears mentioning that The Merge is now only over two weeks away, as developers have slated the upgrade for September 15. Ethereum is exchanging hands for $1,445.37 on mainstream exchanges, 2.52% down in the last 24 hours and 7.99% in the last seven days.
– Advertisement –
Source: https://thecryptobasic.com/2022/08/29/analyst-says-ethereum-may-be-set-for-a-huge-short-squeeze-heres-why/?utm_source=rss&utm_medium=rss&utm_campaign=analyst-says-ethereum-may-be-set-for-a-huge-short-squeeze-heres-why