Ethereum, the second-largest cryptocurrency by market capitalization, has yet to regain the $3,000 price level since early August. Since the beginning of September, Ethereum has mostly traded below $2,600, but this week brought a glimmer of hope for investors as it finally managed to break above the $2,600 mark.

Now that this resistance threshold has been broken, next perspective means a continuous price raise up to the level of $3,000. Analysis on the CryptoQuant platform indicates a potential catalyst for this upward move. Notably, this analysis points to the emerging upward trend in Ethereum funding rates as a critical catalyst.

Bullish change in financing rates

According to ETH analysis on CryptoQuant by ShayanBTC, The 30-day moving average of Ethereum funding rates has seen a petite but noticeable bullish change after an extended period of declines. This change suggests that traders are once again more and more self-confident Ethereum price behavior, especially after recent Fed interest rate cut.

ETH Funding rates refer to periodic payments made between investors to keep the price of perpetual futures contracts near the spot price of the cryptocurrency. When financing rates move favorably, it often means long positions dominate, which can put upward pressure on prices.

The analyst emphasized the importance of financing rates, especially considering the prospect of a growth fourth quarter of the year. In particular, they reiterated that for Ethereum to continue its recovery and reach higher price levels, demand in the perpetual futures market must continue to raise in the coming weeks. A petite drop in financing rates may turn into a decline in bullish momentum.

Ethereum planning a return to $3,000?

Ethereum’s recent break above $2,600 is the first sign of a major shift in market sentiment. After weeks of trading below, it appears that the $2,600 price level has now become a significant support zone for the cryptocurrency. Interestingly, this breakout sets the stage for ETH to return to $3,000, with funding rates playing a pivotal role.

At the time of writing, Ethereum is trading at $2,610, up 8% in the last seven days. It is worth noting that this price raise is more noticeable compared to the low of $2,171 on September 6, reflecting a 20% raise since then.

The positive sentiment around Ethereum is also shifting towards institutional investors, which is reflected through Spot Ethereum ETFs. According to fund flow data, ETFs that initially started the week with net outflows of $79.3 million on Monday have now seen two consecutive days of $62.5 million and $43.2 million on Tuesday and Wednesday, respectively. . The combination of these influences could play a significant role in whether Ethereum can break above the $3,000 price level and stay above it in the coming weeks.

Featured image created with Dall.E, chart from Tradingview.com