Ethereum Will Remain Bearish Until This Key Trading Reading Changes

As a seasoned researcher with over a decade of experience in the crypto market, I can confidently say that the current state of Ethereum (ETH) is a complex one. While the daily chart shows a steady position above $2,500, the bulls are still struggling to gain momentum. Technically, ETH remains inside a bear formation from August 27.


At the moment, Ethereum holds its ground, as demonstrated in the daily chart. Despite the price hovering above $2,500, Ethereum’s bullish momentum appears to be waning. Technically speaking, Ethereum continues to reside within the bearish trend that started on August 27, forming part of a larger bearish pattern.

Based on current market movements, it seems like bears currently have control in the near future. However, if we see a strong, high-volume breakthrough closing above $3,500, this could indicate a swift reversal that might be advantageous for investors.

Will Ethereum Bears Press On? Traders Monitoring This Reading

Initially, one expert anticipates a bearish outlook for the second-most valuable cryptocurrency in the short to medium term. In his analysis using CryptoQuant data, he mentioned that over the past few months, the funding rate on Ethereum perpetuals from exchanges such as Binance and OKX has been positive but has been steadily decreasing.

Via continuous trading interfaces on Ethereum, users can open trades with borrowed funds, amplifying their positions. The higher the level of leverage, the greater the amount they borrow, reducing their protective buffer (safety margin) and heightening the chance of forced settlement (liquidation).

Ethereum Will Remain Bearish Until This Key Trading Reading Changes

In these continuous trading markets, the funding rate might be either positive or negative, depending on the current market trends. If the funding rate is positive, it indicates that the sentiment among traders using leverage is generally optimistic, as they expect the price to rise further.

Here, it’s anticipated that prices will increase significantly. To achieve balance, traders taking long positions will need to compensate those who are short-selling.

On the other hand, when the funding rate is negative, it indicates that investors are generally pessimistic (bearish), suggesting that the market may continue to decline. During such times, individuals who engage in short selling will have to pay those who are buying.

Ethereum Will Remain Bearish Until This Key Trading Reading Changes

Over the last several months, the analyst has observed a consistent decrease in the Ethereum perpetual funding rate, which currently remains above zero. This situation indicates that despite Ethereum’s fluctuating value, reaching as high as $3,900 in May, there seems to be a predominant negative outlook on its future price movement.

Eyes On Spot ETF Net Inflows For Growth

Consequently, if we’re to see a shift in the trend, it requires a significant surge in demand to buy. This, in turn, would not only boost prices but also increase the funding rates on these continuous trading platforms.

Rising funding rates will signal a shift in trend, helping spur demand.

Ethereum Will Remain Bearish Until This Key Trading Reading Changes

As a researcher, I’ve observed that one significant influencer on prices could be the influx into U.S.-listed spot Ethereum Exchange-Traded Funds (ETFs). According to Soso Value, these ETF issuers in the U.S. have collectively recorded net inflows exceeding $5.8 million. However, this recent figure is significantly lower compared to the substantial inflows observed in late July.

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2024-08-29 23:10