Is a Bull Run Coming?

On-chain data provider CryptoQuant analyzes recent Ethereum funding rates, suggesting a possible price surge if the market meets specific conditions.

According to CryptoQuant’s burakkesmeci, Ethereum funding rates, which represent the cost of holding long positions in the futures market, have shown patterns of low activity before sharp increases in the past.

With the rate currently hovering around 0.015, analysts are watching closely for signs of significant market movement, reminiscent of past periods.

Historical Patterns Vs September 2024

In the past, notably September 2023, the funding rate for Ethereum remained relatively low, fluctuating between 0.002 and 0.005 during the early part of the bull cycle. This period was followed by a notable rise in the rate, which pushed Ether’s price from the $1,500 range to above $4,000.

#Ethereum: Watch Out for the 0.015 Point in Funding Rates

“Ether’s funding rate to rise above 0.015 to see if the calm before the storm breaks. A move above this level in funding rates is crucial for tracking healthy increases during bull markets.” – By @burak_kesmeci

Link 👇… pic.twitter.com/NKCYkRbVbe

— CryptoQuant.com (@cryptoquant_com) September 12, 2024

Market analysts are now closely monitoring the calm before the storm pattern observed previously as September 2024 has shown a similar trend. Since August, the funding rate has been stable at 0.015, raising expectations that a price surge could follow.

Per CryptoQuant, historically, the crypto market gains momentum in the final quarter following a quiet summer period. Hence, a parabolic rise in Ether’s price typically depends on positive signals and strong support from the futures market.

Bullish Sentiment Noted

Further analysis from Coinglass also highlights a positive divergence between Ethereum’s open interest-weighted funding rate and its price during recent market activity. This comes specifically after a drop in the metric, seen around September 9 and 10. 

Despite periods of cooling, Ethereum’s market resilience has allowed it to recover quickly, even after minor pullbacks. This resilience has been a strong indicator of ongoing bullish sentiment, with traders remaining confident in maintaining long positions.

Stable or rising prices combined with positive funding rates generally signal continued demand for Ethereum. This suggests that price appreciation may occur if the rates stay positive or increase.

On The Downside 

However, complicating the outlook, Ethereum faces growing challenges. Additionally, declining retail investor interest, with a reported 19% drop in decentralized application usage, has contributed to a bearish sentiment. 

Further, recent actions by an Ethereum-linked wallet, reportedly connected to co-founder Vitalik Buterin, have added further pressure. This wallet sold 190 ETH for approximately $441,971, following a broader pattern of selling over the past weeks.