Ethereum (ETH) appears to be approaching the conclusion of its recent price correction, currently trading just above $4,000 after a dramatic sell-off last week that brought its price close to $3,400.
Ethereum’s Price Correction Might Be Concluding
A recent analysis from CryptoQuant contributor PelinayPA suggests that Ethereum’s funding rates on Binance have remained positive, indicating a persistent dominance of long positions in the market, even as prices stabilize.
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The fluctuating ETH funding rates on Binance—hovering around a modest 0.01% to 0.03%—hint at a lack of the excessive greed usually linked with thriving bullish trends. This is notable, especially given Ethereum’s impressive price advances in the past months.
During the intense bull market of 2021-2022, ETH funding rates frequently spiked, reaching as high as 0.1% to 0.2%, which accompanied previous market tops. The current rates signal that the market hasn’t yet reached a stage of overheating, representing a significant indicator for potential future price movements.
Moreover, the lack of negative funding rates points to a reduced short interest, along with a growing risk appetite among investors. Analyzing the current market conditions, the CryptoQuant analyst noted:
The overarching trend appears to be upward. The combination of low funding rates and solid price momentum suggests that the ongoing correction is likely concluded. It’s reasonable to expect minor profit-taking or a sideways movement between $3,600 and $3,800 in the near term. If funding rates climb above 0.05%, it could indicate overcrowding in long positions and trigger a short-term pullback.
With moderate levels of leverage and gradually increasing spot demand, the conditions hint at a potential rally for ETH, possibly aiming for a price range of $4,500 to $5,000 in the long run. The upward trajectory could even extend further, driven by favorable derivatives dynamics.
However, any sharp rise in funding rates might serve as an early warning sign for a price retracement. Nevertheless, the market structure for ETH still appears conducive for a possible surge to $6,800 before the close of 2025, as hypothesized by the analyst.
Is ETH Set to Hit New Heights?
Several indicators suggest that ETH could be on the verge of rejuvenating its bullish momentum. For example, the Spent Output Profit Ratio (SOPR) trend has recently pointed to the digital asset potentially reaching $5,000 shortly.
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Additionally, ETH reserves on exchanges are dwindling rapidly. Current data indicates that Ethereum held on exchanges has reached a multi-year low, signaling a potential supply crunch that may impact prices moving forward.
Despite this positive outlook, several external factors could still ignite another sell-off, propelling ETH’s price back below the $4,000 mark. As of now, ETH trades at $4,053, experiencing a minor increase of 0.2% over the last 24 hours.
Featured image from Unsplash, charts from CryptoQuant and TradingView.com
