Amid a broader decline in the global cryptocurrency market, Ethereum has emerged as one of the major cryptocurrencies that has been significantly impacted.
Despite already underperforming during the recent bull run, Ethereum has now experienced a noticeable correction, even falling below the $3,500 price level in recent weeks.
While ETH price performance may have caused Ethereum investors to lose interest for now, recent data from the CryptoQuant platform suggests a possible turnaround, with key indicators pointing to renewed market confidence.
Funding rates indicate renewed confidence among traders
CryptoQuant analyst ShayanBTC highlighted the growth of the Ethereum futures market in a recent report analysis titled “Ethereum Futures Market Signals Potential Rebound After 3K Correction. dollars.”
Shayan’s analysis shows that futures funding rates, which serve as a gauge of investor sentiment, have shown signs of stabilizing after falling prices, pointing to a potential recovery.
According to the analyst, Ethereum funding rates have shown an augment after the recent keen correction, indicating a greater appetite among traders for long positions.
In particular, funding rates are a mechanism in perpetual futures contracts where long investors pay miniature sellers or vice versa, depending on market sentiment. When funding rates rise, it usually suggests that investors are leaning towards a bullish outlook.
Shayan revealed that the keen augment in funding rates means increased demand for Ethereum at current price levels, signaling that investors expect a rebound from the $3,000 region.
The analyst further explained that this behavior often precedes significant upward price movements, especially when combined with a period of market consolidation. In his words:
The recent augment in financing rates suggests an influx of buyers which, if sustained, could result in a significant upward rebound. This renewed buying pressure could push Ethereum towards the key resistance at 4k. dollars in the miniature and medium term.
Ethereum market performance
After weeks of steady decline, Ethereum is currently trading at $3,310, having fallen 1.5% in the past day. This market price represents a decline of 32.2% from the all-time high (ATH) of $4,878 recorded in November 2021.
Interestingly, despite the decline in the price of ETH, the asset still saw a slight augment in trading volume over the last day.
In particular, at this time yesterday, the daily trading volume of ETH was below $15 billion, however, at the time of writing, the valuation of the daily trading volume of this asset was $20.6 billion.
Featured image created with DALL-E, chart from TradingView
