Ethereum’s funding rate is almost at the 0.015 level, a critical level that may lead to a high price surge. This level has been crucial in the past as far as the bullish pressure for ETH is concerned.
With buying pressure increasing, investors are eagerly waiting to observe whether this is the start of a larger price trend.
In the past few weeks, Ethereum has reported a significant rise in exchange outflows, which is a positive sign. More than 177,000 ETH, worth approximately $416,000,000, left exchanges in the two days only.
This is a clear indication that investors are positioning themselves for possible positive gains, with both futures and ETF markets seeing an increase in bullish sentiments.
Institutional Investors Show Renewed Interest in Ethereum
Institutional investors have been steadily investing in Ethereum through ETFs after showing some weakness for some time. On Tuesday, Ethereum ETFs recorded $11.4 million in inflows, breaking a five-day streak of outflows.
Especially, BlackRock and Fidelity played a major role, with inflows of $4.3 million and $7.1 million, respectively.
These inflows present signs of the new investors’ trust in Ethereum’s long-term value, even after the recent fluctuations. Institutions continue to hold a bullish view on Ethereum, especially as the asset offers more diversification value.
Also, staking could provide institutional investors with an extra incentive with expected returns of 4% per year via ETFs. Nevertheless, some institutional investors have suggested that there is a need to improve the marketing and the interface design.
Steve Berryman from Attestant is convinced that institutions will invest more in Ethereum if the platform’s value proposition is explained better.
Whales Signal Mixed Sentiment Amid Market Volatility
Although institutional interest is growing, there is uncertainty among whales, which can affect Ethereum’s short-term price trend. More than $538 million worth of ETH has been moved to exchanges in the last several days.
In particular, large holders seem to be positioning for sales, which may lead to sales and downward pressure on prices. These whale transactions have been a cause for concern, especially because Ethereum has been failing to break the $2,300 mark.
If they start selling, ETH can face a lot of selling pressure, which may lead to prices going below $2,100. The chance of more selloffs by whales has also made many retail traders cautious on the market.
Interestingly, despite increased whale activity, retail traders now control 47.93% of the ETH market, while whales account for 43.07%. This shift in market ownership could lead to heightened volatility, as retail traders tend to react more emotionally to market fluctuations.
Funding Rate Reaches Critical Juncture
Ethereum’s funding rate has remained stagnant at around 0.015 for some time now. So far it has been trading at the 0.015 level for almost a month. This has raised more and more concern about price increases in the near future in this line.
Historically, analysis shows that a funding rate that stands above 0.015 has often preceded significant price increases. This level of 0.015 has been common before big price increases with Ethereum, for example, increasing from $1,500 to more than $4,000 in previous cycles.
Ethereum price chart (source: TradingView)
As of September 2024, Ethereum is still below the key resistance level of $2,817. However, if the funding rate goes above the critical rate of 0.015 mark, there is a high likelihood of a bullish cycle, with prices rising to the $2,800, $3000 resistance.
The RSI and stochastic oscillator have also shown that recent bullish momentum has weakened; however, this could alter if the funding rate rises. Traders are looking at Ethereum’s funding rate, exchange flows, and institutional buying and selling to get a clue of the next big move.
A breakout higher than the 0.015 funding rate level would greatly confirm strong market support and may trigger a bullish trend that may propel Ethereum to new heights in the next few months.
