CryptoQuant analyst ShayanBTC notes that funding rates $ETH , an indicator of futures market sentiment, has risen above 0.04 in recent days, describing it as a sign of "increasing bullish momentum."
Funding rates are periodic payments between traders in cryptocurrency futures markets to maintain a balance between the price of a perpetual contract and the spot market price of the asset it tracks.
A funding ratio of 0.04 shows that traders who expect the price of ETH to rise dominate the market. The so-called long traders must pay 4% of the notional value of their position to those traders who expect to profit from the decline in the ETH price so that the contract price matches the spot price of the asset.
According to ShayanBTC, the rise in funding rates indicates "increased demand for long positions," which could help spark strong gains.
