• Ethereum funding rates hit a fourteen month low, similar to short squeeze setup in July 2021. 
  • The funding rate setup is similar to July 2021, ahead of the massive short-squeeze in Bitcoin and Ethereum. 
  • Analysts identify major resistance for Ethereum uptrend between $1,750 and $2,000 level. 

Ethereum funding rates are similar to the level observed in July 2021, ahead of a massive rally in Bitcoin and ETH. The funding rate – the difference between the perpetual contract prices and short prices of an asset – is a key metric to predict crypto trend reversals. 

Also read: Ethereum price: This price can unlock ETH bullish potential post Merge

Ethereum funding rate turns negative, this is what it means

Ethereum funding rates hit a fourteen month low. This metric is used to force convergence of prices between the perpetual contract and the underlying asset. Funding rates represent the payment made by short to long traders or by long to short traders. It is calculated on the difference between the perpetual futures contract price and the spot price of an asset. 

Currently the Ethereum funding rate is negative, so short traders are paying for longs, as the metric hits a fourteen month low. The last time funding rates hit this level was in July 2021, just before a huge short-squeeze in Bitcoin and Ethereum prices. 

Ethereum funding rates- all exchanges

Ethereum Funding Rates- All exchanges 

Negative funding is considered a result of traders hedging their spot exposure to be delta neutral. Maartunn, a crypto analyst argues that the upcoming ETH 2.0 Merge is the driver of this behavior among traders. The analyst therefore argues that Ethereum could be setting up for a short squeeze similar to July 2021. 

Ethereum faces resistance at $1,750

Pentoshi, a pseudonymous crypto analyst and trader believes Ethereum price faces resistance at $1,750 and $2,000. These price levels are key to Ethereum’s sustained uptrend. While funding rates indicate that Ethereum is ready to breakout, the altcoin needs to break past resistance at $1,750. 

ETH-USDT price chart

ETH-USDT price chart 

Ethereum Triple Halving author sees red flag in ETH price trend

In contrast to Ethereum price predictions by Pentoshi and the negative funding rate setup, the author of Ethereum Triple Halving narrative is bearish on ETH. @squishchaos on Twitter, Nikhil Shamapant is bearish on Ethereum as the altcoin is hit by a downtrend, and its correlation to equity risk preference remains high. 

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch

Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch

Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.

More Bitcoin News
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers

Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers

Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins. 

More Bitcoin News
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction

Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction

Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.

More Solana News
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs

SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs

The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.

More Cryptocurrencies News
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy

Bitcoin price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot ETFs in January and the reduced supply following the fourth halving event in April.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP