Ethereum (ETH) Funding Rates Plunge To Most Extreme Territory
September 01 2022 - 5:59AM
NEWSBTC
The highly-anticipated Ethereum merger is one topic that all
hardcore crypto aficionados are talking about.
ETH currently trades below the $1.6K level
Ethereum price nosedives by 1.24% or trading at
$1,570.76 ETH liquidations trigger
price spike Investors are debating whether or not the price of
Ethereum will reach $3,000 since it is on everyone’s mind and a
topic of conversation. When the Ethereum Blockchain and Beacon
Chain fuse together on September 22, 2022, the Ethereum Blockchain
will switch from Proof of Work mechanism to Proof of Stake. As a
result of this shift, Ethereum miners will use significantly less
computing energy. That will lessen the impact on the environment
and soothe some of the concerns about cryptocurrency. Since hitting
a record high price of $4,868 in November 2021, Ethereum has been
slipping under a declining resistance line. Even as we went to
press, ETH was trading below the $1.6k level and had experienced a
new 2% fall. Related Reading: Shiba Inu Burn Events Spark A Rally
In Altcoin Over The Past Weeks Source: CoinMarketCap According to
CoinMarketCap, ETH price has dipped by 9% in the last seven days,
and trading at $1,550 as of this writing. Ethereum Liquidations
Trigger Price Spike Traders’ skepticism of Ethereum is high during
a week of trading that has been extremely erratic. The majority of
investors have sold short (shorted) across exchanges for the first
time since June 2021. Notably, the funding rate drastically
decreased on August 28 and 29. In fact, on August 31, even as we
went to press, the rate remained stable. A negative number meant
that long traders were compensated more than short traders for
holding onto their positions. However, traders shouldn’t really
give up because, in the past, such events have resulted in a price
increase. Price increases were common in these scenarios
historically. A U-turn could be seen in the average financing rate,
which stood barely above the $0 level, as it did at the time of
writing. Similar to how ETH might experience a price spike while
the market is still too leveraged and liquidate a sizable volume of
short positions. More short positions are washed down as a result
of these liquidations, which raise the price even higher. Surge In
Open Interest Validates ETH Popularity However, not everyone
believed that ETH would be able to get beyond the formidable $1.6k
resistance barrier. As noted by renowned analyst Lark Davis, it
actually coincided with the (potential) short-term decline.
Unquestionably a pessimistic narrative just before the Merge.
Despite this, ETH’s demand won’t completely disappear overnight.
While Bitcoin investment goods witnessed a 7.16% decline to $17.4
billion in August, Ethereum investment products saw a gain of 2.36%
to $6.81 billion in assets under management (AUM). Furthermore,
open interest is still surging in the options market, indicating
that market participants are very interested in ETH. Related
Reading: PancakeSwap Adds Some Sweetness, Expands 6% In Last 7 Days
BTC total market cap at $188 billion on the daily chart | Source:
TradingView.com Source: Nenad Novaković - Unsplash, Chart from
TradingView.com
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