Originally published on: November 12, 2024
Ethereum has recently seen a significant price surge, reaching $3,444 on Nov. 12, its highest level since July. This rise followed Bitcoin’s climb to an all-time high before adjusting. Traders are now wary of potential risks of a price correction below $3,200 due to excessive leverage in Ether futures.
When the funding rate of Ether futures spikes, it signifies excessive bullish sentiment in the market. The 6.1% per month funding rate seen on Nov. 12 is the highest level in eight months, indicating a potential imbalance between long and short positions. This imbalance could lead to a price correction as traders adjust their positions.
To navigate these uncertainties, traders can explore alternative funding methods, such as monthly Ether futures contracts or margin trading with stablecoins. Analyzing derivative metrics like Ether options market skew can also provide insights into market sentiment and potential future price movements.
Despite the surge in leveraged Ether futures demand, data suggests that overall market sentiment remains neutral, with no imminent risk of cascading liquidations. The influx of net inflows to Ether ETFs in the U.S. further reinforces the view of a healthy spot market demand.
While some indicators point to a potential price correction, the overall market outlook remains stable. Traders should stay vigilant and monitor key metrics to make informed trading decisions in the ever-evolving cryptocurrency market. Subscribe to our newsletter for more critical insights and investment opportunities.
