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Ethereum is undoubtedly under pressure despite the recent bull run in the broader cryptocurrency market as it struggles to make any significant upward move.
Modern analysis Written by ShayanBTC, a contributor to the CryptoQuant QuickTake platform, highlighted the key factors Impact on Ethereum performance.
In a post titled “Ethereum faces a crossroads: Funding rates and $3K support key to maintaining bullish momentum,” Cheyenne highlighted the asset’s struggle to maintain its upward trajectory.
Funding rates and the importance of the $3,000 support level
According to Cheyenne, Ethereum’s bullish momentum has been significantly challenged by fluctuations in funding rates, a key indicator of demand in the derivatives market.
While these rates initially rose during the recent rally in the cryptocurrency market, indicating growing confidence, there was a subsequent decline after Ethereum was rejected in a board meeting. Resistance level is $4000 Which indicates low trader interest and commitment.
It is worth noting that the rise in financing prices during the rally indicated cautious optimism among traders. However, the sharp decline in these rates subsequently highlights the decline in demand for Ethereum in the derivatives market.
This shift raises concerns about the sustainability of the uptrend, especially in light of Ethereum’s inability to breach the $4,000 resistance level.
the Support level is $3000 It has emerged as a pivotal threshold for Ethereum. Shayan emphasized that maintaining this level is crucial to stabilizing the market and possibly reigniting bullish momentum.
Failure to hold more than $3,000 may increase selling pressure, leading to a deeper market correction. The analyst wrote:
Overall, Ethereum’s forecast is based on regaining higher funding rates and defending $3K. These factors will determine whether the market will resume its uptrend or face further corrections.
Ethereum market performance
Meanwhile, Ethereum has continued to show bearish movements, especially as the broader market has recently turned bearish. Over the past week, Ethereum’s market capitalization has decreased by 6.2%. Bringing its price to less than $3,500.
However, over the past day, there has been a slight increase in the price of ETH as the asset registered a 0.9% increase. This slight increase has pushed the price of ETH above $3,200 at the time of writing, representing a 33.9% decline away from the all-time high of $4,878 recorded in November 2021.
Interestingly, although the price of ETH declined last week, the daily trading volume of the asset faced an opposite trend during the same period. In particular, ETH’s daily trading volume has gone from $20 billion last Friday to over $26 billion as of today.
Given the current trend in ETH, it is worth noting that this Increase in trading volume This may be a result of the high buying pressure and ongoing selling pressure in the Ethereum market.
Featured image created with DALL-E. Chart from TradingView
