Ethereum

Ethereum’s Positive Funding Rates Push Price Near $4K—Are There Any Downsides?

Published

1 week ago

November 13, 2024

Coin2049 Newsletter

Ethereum has recently climbed to a major high above $3,400, reigniting enthusiasm among market participants and signaling a potential upward trend that may lead to a push above $4,000 toward a new all-time high.

This optimism has been met with major speculation of ETH’s price from the crypto community and analysts, who are observing key indicators within the market to assess the asset’s trajectory.

Ethereum Rise and Market Sentiment

According to a report shared by a CryptoQuant analyst known as ‘ShayanBTC,’ Ethereum’s recent price performance, up by 35% in the past week, has been accompanied by positive sentiment in the futures market, providing a detailed look into potential short-term fluctuations.

Shayan pointed out that the funding rates for Ethereum futures have remained positive, demonstrating strong demand and bullish sentiment among investors.

Ethereum funding rates.

Notably, positive funding rates typically indicate buyers are willing to pay a premium to hold long positions, which signifies market confidence.

The analyst highlighted that this surge in positive sentiment was especially evident when Ethereum surpassed the $3,000 mark, reflecting a similar pattern observed during the March 2024 rally that culminated in a yearly peak.

This pattern now raises questions about whether the current momentum can be sustained or if the market is vulnerable to sudden reversals, just as it did following a major rally earlier this year.

What Is Expected

While positive funding rates are a favorable sign of market interest, they can also indicate heightened risk when they become too elevated. Shayan particularly noted:

Although positive funding rates generally signify healthy demand in a bullish market, elevated funding rates can be a red flag.

The analyst cautioned that high funding rates may point to an “overheated” market, which could increase the likelihood of a long liquidation cascade if the price faces significant resistance or experiences even a modest correction.

Elevated rates suggest that traders may be over-leveraged, creating conditions where a sharp pullback could trigger a wave of sell-offs as leveraged positions are liquidated.

The CryptoQuant analyst further revealed that with Ethereum experiencing high funding rates in the current market climate, investors may need to “exercise caution and adopt strategies to mitigate potential risks.”

The analyst emphasized that with heightened funding rates comes an increased chance of market volatility. Rapid price movements could lead to liquidations, particularly if profit-taking or minor corrections unsettle the market.

Meanwhile, Ethereum has breached the $3,400 price mark to trade as high as $3,424 earlier today. However, at the time of writing, the asset appears to have seen a slight correction with a current trading price of $3,289, albeit still up by 2.2% in the past day.

Ethereum (ETH) price chart on TradingView

Featured image created with DALL-E, Chart from TradingView

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Ethereum

Ethereum Consolidation Continues – Charts Signal Potential Breakout

Published

2 hours ago

November 21, 2024

Coin2049 Newsletter

Este artículo también está disponible en español.

Ethereum (ETH) has consolidated since November 12, when it hit a local high of $4,446. Despite Bitcoin’s impressive rally capturing market attention, Ethereum has struggled to maintain upward momentum and reclaim its yearly highs. The price action reflects a period of indecision, as ETH faces challenges in breaking through significant resistance levels that could reignite bullish sentiment.

Ethereum Prepares To Surge

Ethereum has been underwhelming in its price action since March, struggling to keep pace with Bitcoin’s performance. Despite a few notable surges, ETH has yet to achieve the breakout investors eagerly anticipate.

The prolonged consolidation has frustrated some traders, but an optimistic sentiment remains among those who believe Ethereum is poised for a significant rally once it clears key supply levels.

T op crypto analyst Carl Runefelt recently shared his technical analysis on X, highlighting Ethereum’s current position within a bullish flag pattern. According to Runefelt, ETH has attempted to break out of this formation for the past two weeks, facing stiff resistance at critical supply zones. However, he remains confident that it could rapidly surge to $4,150 once Ethereum breaches this level.

Ethereum struggles to break out of this Bullish flag | Source: Carl Runefelt on X

Such a move would mark a substantial percentage increase from current prices, sparking a wave of investor enthusiasm. The fear of missing out (FOMO) could drive additional buying momentum, creating a self-reinforcing price appreciation cycle. If ETH follows this trajectory, it would confirm the bullish flag breakout and signal Ethereum’s return to a dominant position in the crypto market.

ETH Price Action: Technical Details

Ethereum is trading at $3,120 following several days of sideways consolidation below its recent local high of $3,446. Despite the pause in upward momentum, ETH has shown strength by surging above the critical 200-day moving average (MA), currently at $2,957, and maintaining its position above this key technical indicator.

ETH trading above its 200-day MA | Source: ETHUSDT chart on TradingView

The 200-day MA is often a pivotal line between bullish and bearish trends. Ethereum’s ability to stay above it signals robust support from buyers and growing confidence in the market. If ETH continues to hold this level, it could pave the way for a bullish surge, with the first target being the local top at $3,446.

Beyond that, a break above this resistance level could see ETH aiming for yearly highs near $4,000, reigniting enthusiasm among traders and investors. Such a move would likely confirm Ethereum’s return to a sustained uptrend, aligning it more closely with Bitcoin’s recent bullish performance.

Ethereum Holders Endure Unrealized Losses – Is ETH Undervalued?

Published

10 hours ago

November 20, 2024

Coin2049 Newsletter

Ethereum (ETH) has been underperforming in this cycle, trailing far behind Bitcoin’s impressive rally to new all-time highs. While Bitcoin captures headlines with its continued surge, ETH struggles to reclaim its yearly highs, leaving many investors questioning its next move.

Despite the lackluster price action, data from CryptoQuant CEO Ki Young Ju reveals a silver lining for ETH holders. According to Ju, many ETH investors are enduring unrealized losses, reminiscent of ETH’s early 2020 bottom before its explosive bull run. This suggests that the current market conditions might offer a unique opportunity for long-term ETH investors.

Ju’s analysis highlights that substantial price recoveries have historically followed such phases of unrealized losses. If Ethereum starts to gain momentum and close the gap with Bitcoin, the potential gains could be massive. For investors, this could mark the beginning of an upward trend, rewarding those who remain patient during this period of consolidation.

With market sentiment shifting and historical data supporting a bullish case, ETH’s next move could be pivotal. Investors and analysts closely watch ETH’s price action, hoping for signs of a breakout that could reignite its momentum and deliver significant returns.

Last Chance To Buy Ethereum?

Despite Ethereum’s underwhelming performance this cycle, there are signs of bullish price action in recent weeks. ETH has remained relatively stagnant compared to Bitcoin’s meteoric rise. However, optimistic signals suggest this could be the last opportunity to accumulate ETH at discounted prices before it starts its ascent toward new highs.

Critical data from CryptoQuant CEO Ki Young Ju sheds light on an interesting development: the ETH-BTC NUPL (Net Unrealized Profit/Loss) has reached a 4-year low. This indicates that, despite Ethereum’s lagging performance against Bitcoin, many ETH holders are enduring unrealized losses.

Ethereum ETH-BTC NUPL hits a 4-year low | Source: Ki Young Ju on X

This mirrors Ethereum’s early 2020 bottom situation, just before it began its explosive rally. Ju believes that this period of underperformance might present an opportunity for long-term ETH investors, as it could set the stage for a potential surge.

However, Ju also notes that Ethereum’s future heavily depends on the revenue generated by Web3 applications, particularly through stablecoins. While the ecosystem remains promising, it also feels heavily leveraged, and the issue of sustainable growth through Web3 app revenue doesn’t seem likely to resolve anytime soon.

Over a one-year timeframe, Ju finds ETH less appealing than BTC, although regulatory clarity in the future could change the dynamics and enhance Ethereum’s appeal. For now, this period of consolidation presents a critical moment for ETH believers to position themselves before any significant price movements.

ETH Testing Crucial Demand

Ethereum is testing crucial demand above the $3,000 level, trading at $3,120 after several days of sideways consolidation below its local high at $3,446. This consolidation suggests that ETH is preparing for a potential breakout, especially with its recent surge above the key 200-day moving average at $2,957. Holding above this key support level is critical for maintaining bullish momentum.

ETH trading above $30,000 and 200-day MA | Source: ETHUSDT chart on TradingView

If Ethereum stays above the 200-day moving average and continues its upward trajectory, the next major resistance zone will be the local high at $3,446. A successful breakout above this level could pave the way for ETH to challenge its yearly highs, potentially reaching the $4,000 mark.

The current price action indicates a solid demand foundation above $3,000, and if ETH can maintain this level, it could trigger a bullish surge. However, failure to hold above the 200-day moving average could lead to a retest of lower support levels, such as $2,900 or even $2,500.

As of now, ETH remains poised for a potential move higher, and traders are watching closely for confirmation of a breakout to new highs.

Featured image from Dall-E, chart from TradingView

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Ethereum

Is Ethereum Undervalued? Investors Hold Firm While Price Targets Rise

Published

22 hours ago

November 20, 2024

Coin2049 Newsletter

Ethereum has experienced a noticeable surge in its price recently, trading above the psychological $3,000 price mark, which has reignited interest in the crypto market. According to on-chain analysis, retail investors appear to be adopting a “hold” strategy, resisting the urge to sell despite the increase in ETH’s value.

Market analysts view This holding behavior as significant, especially considering the broader market sentiment influenced by the so-called “Trump Trade,” which has contributed to easing risks and enhancing market conditions.

Limited Ethereum Deposits To Exchanges

According to the onatt, the CryptoQuant analyst behind the analysis, this trend of holding ETH without significant profit-taking suggests that many investors still perceive the cryptocurrency as “undervalued,” even at its elevated levels.

Another factor onatt mentioned supporting this observation is the limited inflow of ETH to major exchange deposit addresses such as Binance and OKX, indicating that traders are not moving their assets to sell.

Ethereum retail investors holding.

Generally, large volumes of ETH flow into exchanges typically signal impending selling pressure. However, this has not been the case, reflecting a cautious but optimistic outlook among retail market participants.

Key Metric Highlighting Investor Sentiment

Another major metric the CryptoQuant analyst highlighted reinforcing this “hold” sentiment is the Spent Output Profit Ratio (SOPR), which tracks the profitability of spent coins.

onatt reveals that this metric remains close to 1, indicating that most Ethereum transactions are happening near breakeven levels. This data indicates a lack of significant profit realization among ETH holders, highlighting a strong “buy and hold” sentiment.

According to the analyst, when paired with low exchange inflows, this metric also suggests that investors are maintaining confidence in Ethereum’s long-term growth potential.

Furthermore, onatt’s analysis suggests that as long as ETH maintains levels above $2,800, it could pave the way for a swift move toward the $4,000 range.

So far, Ethereum is currently still trading above just above $3,000. While the asset’s price increase is nowhere near that of BTC, it has managed to maintain stability above the crucial psychological price level.

At the time of writing, ETH has surged by 0.2% in the past day with a current trading price of $3,100—a price mark that brings Ethereum a 36.4% decrease away from its all-time high (ATH) of $4,878 registered in 2021.

Ethereum (ETH) price chart on TradingView

Analysts have suggested that the current market price of ETH is a notable buying opportunity for the asset. A crypto enthusiast known as venturefounder has particualry predicted a “conservative” $10k-$13k price target for ETH.

$ETH: road to $13k

This could be a transformative cycle for #Ethereum.

$10k-$13k is conservative. pic.twitter.com/q3Er9EG9gS

— venturefounder (@venturefounder) November 19, 2024