Despite the ongoing market volatility, the ETH price has managed to hold firm above $2,600 supported by the surge in the Ethereum funding rate. Development in the derivatives market shows that investors are turning bullish eyeing a rally to $3,000.
Ethereum Funding Rates Shows Bullish Shift in ETH Price
Popular blockchain analytics platform CryptoQuant reported that the 30-day moving average of the Ethereum funding rate has turned bullish after a prolonged period of decline. This shift aligns with the broader market recovery and the ETH price surge of over 15% in the last week.
The surge in the Ethereum funding rate shows an uptick in the buying activity among the futures traders. This suggests that market participants are looking beyond the recent selloffs by the Ethereum Foundation thereby undertaking a bullish outlook. For Ethereum to sustain its recovery and target higher price levels, demand in the perpetual futures market must continue to rise in the coming weeks.
A sustained increase in funding rates could lead to a further ETH price surge in the mid-term, noted CryptoQuant. Analysts are predicting that Ethereum could soon surge past the key resistance of $3,000.
Courtesy: CryptoQuant
Ethereum has also benefitted from the Fed rate cut of 50 bps earlier this month. On the other hand, the Chinese central bank PBoC announced its stimulus package that could usher in more liquidity in the market. This could prove to be a major catalyst to trigger the next stage of the rally.
QCP Capital analysts said the macro space continues to look more bullish for risk assets, including crypto after rate cuts and China stimulus.
“We believe more easing is coming from the People’s Bank of China (PBoC), and they have communicated as much, and combined with the U.S. Federal Reserve joining the global cutting cycle, all major central banks, except Bank of Japan, are now ready to inject more liquidity into the market.”
On the technical chart, the ETH price is approaching a crucial resistance of $2,800, before it surges past $3,000. The altcoin could face some selling pressure at $2.8K, crossing which can set the next stage of the rally.
Courtesy: TradingView
Along with the Ethereum funding rate, the ETH/BTC ratio has seen a strong recovery over the past week gaining more than 33%. This shows that investors prefer ETH over BTC at this stage. As of now, the ETH/BTC ratio stands at 0.04.
Spot Ethereum ETF Inflows Bouncing Back
The US spot Ethereum ETFs outflows surged recently amid the waning interest in the altcoin. The largest inflow came amid the renewed sentiment in the broader crypto market and experts such as Arthur Hayes recommended buying ETH despite recent concerns.
On Tuesday, September 24, the spot Ethereum ETFs had some healthy bounce back with over $62 million in inflows. The BlackRock Ethereum ETF (ETHA) clearly dominated the flows registering $59.3 million in flows. None of the ETF issuers saw any outflows on Tuesday.
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