Ethereum futures traders hint at renewed optimism as funding rates turn positive: CryptoQuant
2024-09-26

Indicators in the Ethereum derivatives market are signaling renewed optimism, with the 30-day moving average of funding rates showing a positive shift, suggesting growing bullish sentiment among futures traders, according to an analyst.
CryptoQuant Head of Research Julio Moreno observed that this recent uptick comes after a prolonged decline, indicating that market participants may be turning more bullish. "In general, positive and increasing funding rates show the willingness of traders to open long positions in the perpetual futures market. It is historically associated with the expectation of higher prices," Moreno told The Block.
Ethereum perpetual futures funding rate 30-day moving average has shown a slight bullish shift. Image: CryptoQuant.
He emphasized, however, that this slight increase alone does not guarantee a sustainable price rally. "But, the increase in the funding rate 30-day moving average is a positive sign," he added.
Data from Coinglass also highlights that Ethereum’s open interest-weighted funding rate has been trending positively since the U.S. Federal Reserve's interest rate cut on September 18, currently standing at 0.0089%. QCP Capital analysts also noted improvements in funding rates across major exchanges, attributing this to the recent rate cut. "Funding rates on major exchanges are improving, and basis yields are becoming more attractive, particularly with the recent interest rate cuts," the analysts commented, highlighting increasing optimism in the crypto derivatives space.
Ethereum's open interest-weighted funding rate has remained positive since the U.S. Federal Reserve rate cut on September 18. Image: Coinglass
The perpetual futures market significantly influences market sentiment and price trends. It is a barometer of traders' expectations, offering insights into potential market movements in the coming weeks.
The recent shift in Ethereum’s futures funding rates coincides with a broader market rebound and price uptick. Since the U.S. Federal Reserve cut the Federal Funds rate by 50 basis points on Wednesday, Sept. 18, ether has appreciated by over 17%, outperforming bitcoin, which saw a 10% increase during the same period.
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