Key Points
- Ethereum’s futures open interest and key indicators suggest a mid-term price rally.
- Despite market consolidation in March, Ethereum’s funding rates remained positive, indicating bullish sentiment.
Ethereum’s Mid-Term Rally
Ethereum may be on the cusp of a significant rally, according to a recent report by an anonymous CryptoQuant analyst.
The report analyzed Ethereum’s futures market and discovered that despite the overall market consolidation in March, Ethereum’s funding rates have stayed positive and its open interest has continued to rise.
Funding Rates and Open Interest
Funding rates are utilized in perpetual futures contracts to keep the contract price near the spot price.
Positive funding rates occur when the contract price is higher than the spot price, leading to long position traders paying a fee to those shorting the asset.
The report noted a “corresponding spike in the funding rates metric” as Ethereum attempts to reclaim the $4,000 price mark.
Data from Coinglass showed that Ethereum’s funding rate was a positive 0.024%. A positive and increasing funding rate indicates that more traders are holding long positions and expecting the asset’s price to rise in the short to mid-term.
Ethereum’s futures open interest, which also increased due to the double-digit price rally in the past week, was $15 billion at the time of the report.
Market Sentiments
March was largely characterized by bearish sentiments, causing Ethereum’s price to remain within a narrow range.
However, some indicators on a 1-day chart showed that the recent price rally suggests bulls are attempting to re-enter the market.
For instance, Ethereum’s MACD line rested above its signal line for the first time since 15th March, indicating an increase in bullish momentum in the short term.
Furthermore, Ethereum’s Directional Movement Index (DMI) showed a change in sentiment from bearish to bullish as its positive directional index crossed above its negative index on 7th April.
