Typically, a surge in Funding Rates suggests that traders are overwhelmingly more confident in the prospect of short-term price upswing, and as a result offer higher fees to keep their LONG contracts open.
Unsurprisingly, ETH price wobbled to a new yearly peak within hours of this surge in funding rate.
In essence, the chart shows that, after a skittish 24 hours, Ethereum futures traders have regained confidence, and are showing conviction to drive spot prices towards the next milestone, possibly above $3,500.
Ethereum Price Forecast: Coasting Towards $3,500?
The Ethereum bulls’ rare show of confidence, denoted by the 300% spike in funding rates between Feb 26 and Feb 27, suggests that ETH price will likely advance towards $3,500 in the days ahead.
IntoTheBlock’s global in/out of money data which categorizes existing ETH holders by their entry prices also affirms this stance.
It shows that, with Ethereum currently trading at $3,250 at press time, about 80% of current holders are in profit. Majority of them may be unwilling to sell, thereby accelerating the rally.
In this instance, the 1.03 million addresses that acquired 218,650 ETH at the average price of $3,300 could be the next significant resistance to beat.
However, if that key resistance level crumbles as anticipated by the bullish futures traders, a rally above $3,500 could be on the cards.