The funding rates metric is a key indicator of sentiment in the futures market. Analysing its recent behaviour offers valuable insight into Ethereum’s latest surge. In healthy and sustainable bullish trends, funding rates typically rise gradually, indicating increased participation from buyers in both the perpetual futures and spot markets.
Currently, however, funding rates remain relatively flat, showing no significant uptick. This suggests that Ethereum’s recent price surge has been primarily driven by spot market demand rather than speculative activity in the futures market. This is a bullish sign, as it implies the uptrend is organic and not fueled by excessive leverage, reducing the risk of liquidation cascades and indicating a more stable trend.
Still, for the bullish momentum to be sustained and validated, funding rates should begin to rise, reflecting increased confidence and more aggressive positioning by futures traders.
Written by ShayanMarkets
