The world’s second-largest cryptocurrency Ethereum (ETH) continues on a strong ride upside gaining another 7% and moving closer to $3,900. As of press time, the Ethereum price is trading at $3,775 with its market cap crossing $45o billion.
Ethereum Funding Rates on the Rise
A recent surge in ETH price demonstrates renewed faith among investors while igniting a flurry of buying activity in the cryptocurrency market. According to analysis from CryptoQuant, a key metric shedding light on these market dynamics is Ethereum’s funding rates, which serve as a gauge for the intensity of trades in the futures market. Positive rates denote a bullish outlook, whereas negative rates signify a bearish sentiment among traders.
The Ethereum funding rates have experienced a substantial uptick, similar to levels observed in late 2020 when ETH embarked on a robust bullish rally toward its all-time high. This surge in funding rates underscores a prevailing bullish sentiment among futures traders, hinting at the potential for a sustained upward trend.
Despite the positive sentiment accompanying rising funding rates, investors should warrant caution as excessively high values can pose risks. Elevated rates increase the likelihood of long liquidation cascades, potentially leading to heightened market volatility and unforeseen corrective movements. Therefore, traders need to closely monitor funding rates amidst ETH’s bullish momentum and implement effective risk management strategies, reports CryptoQuant.
Gearing Up for Dencun Upgrade
Ether has recommenced its upward trajectory, aiming for the significant $4,000 milestone, even in the face of widespread profit-taking by investors.
Scheduled to launch on March 13, the Ethereum Dencun upgrade represents a pivotal advancement on the Ethereum mainnet. This milestone holds considerable significance for Layer 2 chains and rollups, signifying progress in Ethereum’s technical infrastructure.
Described as the most consequential enhancement for the Ethereum blockchain since the Merge, the Dencun upgrade introduces a groundbreaking feature known as “proto-danksharding.” This innovation involves the utilization of blobs, which alleviate strain on the underlying blockchain infrastructure and decrease expenses for Layer 2 chains and rollups reliant on the Ethereum network. Integral to the Dencun upgrade is EIP-4844, a pivotal Ethereum Improvement Proposal facilitating this capability.
The post Ethereum Funding Rate Sees Major Uptick, ETH Price Gearing for Strong Rally appeared first on CoinGape.
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