Ethereum Funding Rates Hit Key Bullish Level – Price Surge Ahead?

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As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed numerous market cycles and trends that have shaped the world of finance as we know it today. The recent surge in Ethereum (ETH) following Donald Trump’s victory in 2016 is reminiscent of the dot-com bubble of the late 90s, albeit with a digital twist.

After Donald Trump won the U.S. presidential election on November 5, Ethereum (ETH) and the broader cryptocurrency market have seen significant price surges. Notably, Ethereum itself has experienced a 24.31% value increase over the past four days as it nears a critical $3,000 price barrier.

Ethereum Prepares For Potential Surge As Funding Rates Hit 0.02

In light of the latest surge in crypto prices over the past week, analyst Burak Kesmeci points out that Ethereum’s funding rates have surpassed 0.02, an indication often seen as a robust bullish sign.

Typically, funding payments are periodic transfers exchanged among traders involved in perpetual future contracts during specified funding periods. When the funding rate is 0.02, it suggests that long positions hold more dominance, and as a result, long traders are required to pay 2% of their position’s value to short traders to keep the price of these contracts aligned with the current market price of the underlying asset.

As a crypto investor, I’ve found that taking long positions in futures markets can be instrumental in kick-starting robust bull rallies, similar to making purchases in the spot market. Remarkably, data from the past suggests that Ethereum tends to undergo significant price surges whenever funding rates exceed 0.02 and remain above this level, as highlighted by the analyst.

Starting with the instance when Ethereum’s funding rate reached 0.02 on July 1, 2020, the market saw an increase of more than 100% within just 50 days. Similarly, from November 2, 2020, Ethereum began a strong upward trend and soared by over 1000% in approximately 350 days. Notably, Kesmeci points out that the value of Ethereum surged by 150% within 150 days following a funding rate crossing 0.02 on October 4, 2023. Thus, based on this trend, Kesmeci predicts that Ethereum might be ready for a powerful bullish surge in the near future.

Moreover, it’s anticipated that this possible upward trend could impact other cryptocurrency markets, given Ethereum’s status as the most valuable altcoin in terms of market capitalization.

ETH Meets Crucial $3,000 Resistance Level

As Ethereum’s value remains steadily over $2,900, it appears poised to meet a substantial obstacle near the $3,000 price point. Based on findings from blockchain analysis firm IntoTheBlock, this resistance level – a notable area of historical demand – is typically expected to present significant challenges to Ethereum’s upward momentum.

Despite the resistance currently being faced by Ethereum in its market, the ongoing bullish trend might overcome it, keeping the asset on an upward trajectory. If Ethereum manages to surpass $3,000, it could potentially reach a price target of $4,000. However, if there’s a rejection, Ethereum may drop to trade around $2,400 instead.

Currently, as I’m typing this, Ethereum is being traded at approximately $2,970, having experienced a 0.98% increase over the past 24 hours.

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2024-11-09 18:40