Ethereum Will Remain Bearish Until This Key Trading Reading Changes
August 29 2024 - 4:00PM
NEWSBTC
Ethereum is steady at press time, as is visible in the daily chart.
Even though prices are floating above $2,500, ETH bulls are still
weak. The coin remains inside the bear bar of August 27,
technically inside a bear formation. From price action, it would
take effort for bulls to take charge in the short term. A
convincing high volume close above $3,500 would signal a rapid
trend shift beneficial for holders. Will Ethereum Bears Press On?
Traders Monitoring This Reading Before then, one analyst thinks the
short to medium term projection for the second most valuable coin
is bearish. In an analysis, citing CryptoQuant data, the analyst
said over the last few months, the funding rate in Ethereum
perpetuals across exchanges like Binance and OKX has been positive
but falling. Related Reading: Chainlink (LINK) Could Drop To $8 If
It Loses Current Support: On-Chain Data Reveals Through perpetual
platforms, Ethereum traders can place positions using leverage,
essentially borrowing from the exchange. The more leverage they
have, the more they have to borrow, narrowing their safety margin
and increasing the risk of liquidation. Depending on the prevailing
price action, the funding rate in these perpetual markets can be
positive or negative. Whenever the funding rate is positive, the
outlook among leveraged traders is bullish. In this case, they
expect prices to rise higher. For equilibrium, traders posting long
positions have to pay those who are selling. Conversely, a negative
funding rate means the prevailing sentiment is bearish, and the
markets could fall further. In this event, short sellers must pay
those posting buys. Looking at the price trend over the past few
months, the analyst notes that the funding rate for Ethereum
perpetuals has been consistently falling, though still in the
positive territory. This state of affairs means that, though ETH
has been wavy, moving even to $3,900 in May, the dominant sentiment
is bearish. Eyes On Spot ETF Net Inflows For Growth Therefore, for
the trend to change, there must be a sharp spike in buying
interest. In turn, this will also help lift prices and funding rate
across these perpetual platforms. Related Reading: Dogwifhat On The
Edge: Can WIF Hold Above $1.47 As Bears Close In? Rising funding
rates will signal a shift in trend, helping spur demand. One of the
many factors that may drive prices is inflows to spot Ethereum ETFs
in the United States. According to Soso Value, all spot Ethereum
ETF issuers in the country recorded net inflows of over $5.8
million. Still, this reading is way lower than what was seen in
late July. Feature image from DALLE, chart from TradingView
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