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Ethereum, the second largest cryptocurrency by market capitalization, has yet to recover the $3,000 price level from early August. Since the beginning of September, Ethereum has traded mostly below $2,600, but this week brought a glimmer of hope to investors as it finally managed to break above $2,600.
Now that this resistance limit has been broken, the next idea a steady rise up to the $3,000 price level. Analysis of the CryptoQuant platform points to a potential innovator in this trend. Notably, this analysis points to the bullish trend from Ethereum’s funding levels as the most important factor.
Bullish Shift in Funding Levels
According to the Analysis of ETH on CryptoQuant by ShayanBTC, Ethereum’s 30-day moving average of funding levels has seen a small but significant bullish turn after a long downtrend. This change suggests that traders again more confidence Ethereum price performance, especially after The Fed’s latest interest rate cut.
ETH funding rates refer to periodic payments made between traders to keep the value of futures contracts constant near the spot price of the cryptocurrency. When interest rates move positively, it usually indicates that long positions are dominant, which can create upward price pressure.
The importance of funding levels was emphasized by the analyst, especially given the outlook for the fourth quarter of the year. Notably, they emphasize that in order for Ethereum to continue to gain and target higher price levels, the demand in the futures market must continue to increase in the coming weeks. A slight drop in funding levels could be a sign of a decline in bullish momentum.
Ethereum Staging A Return to $3,000?
The recent release of Ethereum above $2,600 is the first signal of a major change in market sentiment. After weeks of trading below, the $2,600 price level appears to have become an important support area for the cryptocurrency. Interestingly, this breakout sets the stage for ETH’s return to $3,000, with support levels playing a key role.
At the time of writing, Ethereum is trading at $2,610 and is up 8% over the past seven days. Notably, this price increase is most visible from the low of $2,171 on September 6, representing a 20% increase since then.
The positive sentiment surrounding Ethereum is also looking towards institutional investors, it seems by using Spot Ethereum ETFs. According to the flow data, ETFs, which started the week with a total outflow of $79.3 million on Monday, have now seen two consecutive days of $62.5 million and $43.2 million, respectively, on Tuesday and Wednesday. The combination of these inflows can play an important role in whether Ethereum can break the $3,000 price level and continue above in the coming weeks.
The featured image was created with Dall.E, a chart from Tradingview.com