Ethereum Sees Increased Activity Despite Stable Funding Rates

Ethereum (ETH) has experienced a significant increase of over 40% in the last two weeks, currently trading in the mid-$2,000 range. Notably, various indicators suggest that this ongoing ETH upswing is primarily fueled by demand in the spot market rather than leveraged trading—an optimistic sign for a potentially sustainable bullish trend.

ETH Rally Powered by Spot Market Demand

After falling behind significant cryptocurrencies such as Bitcoin (BTC), Solana (SOL), and XRP for most of the previous year, ETH is now displaying signs of an organic upward movement. According to an analysis by CryptoQuant expert ShayanMarkets, the current upward momentum is largely driven by spot demand rather than speculative futures trading.

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In a recent post from CryptoQuant Quicktake, ShayanMarkets pointed out that funding rates for ETH have remained relatively stable despite recent price increases. This is important because funding rates typically indicate sentiment in the perpetual futures market.

To elaborate, funding rates represent periodic payments exchanged among traders in perpetual futures contracts to ensure contract prices align with the spot price of the asset. Higher funding rates indicate that longs are paying shorts, generally suggesting positive market sentiment, whereas lower rates denote bearish sentiment.

In the case of Ethereum, stable funding rates during the recent surge suggest that the increase in price stems from genuine purchases in the spot market, not speculative leverage. This stability makes the upward trend less vulnerable to abrupt reversals caused by mass liquidation events. ShayanMarkets noted:

For the positive momentum to be maintained and validated, funding rates must start to rise, demonstrating heightened confidence among futures traders.

Meanwhile, various analysts foresee potential further gains for ETH. For example, crypto analyst Ali Martinez recently stated that should ETH decisively surpass the resistance level at $2,380, it may initiate a new bull market.

In his latest post, Martinez emphasized that ETH’s crucial support range now spans from $2,060 to $2,420, with nearly 10 million wallets holding over 69 million ETH within this range.

Potential New ATH for ETH?

Although Ethereum is still significantly below its all-time high of $4,878 achieved in November 2021, many observers in the market believe that a new all-time high could be forthcoming for the second-largest cryptocurrency by market cap.

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In a similar vein, crypto analyst Titan of Crypto recently pointed out that ETH appears to be demonstrating a V-shaped recovery. The analyst shared a weekly chart comparing the price trajectories of BTC and ETH, predicting that ETH may mirror BTC’s upward path.

Additionally, analyst Ted Pillows outlined five bullish factors that could drive ETH to $12,000 in 2025, citing favorable regulatory conditions and strong inflows into spot exchange-traded funds. At the moment, ETH is trading around $2,555, reflecting a 3% increase in the past 24 hours.

Featured image sourced and graphs from various analytical platforms.