- Ethereum’s ETH price has surged to its highest level since April 2022 as bullish traders increase leverage amid anticipated network upgrades and rising ETF volumes.
- ETH funding rates spiked 300% from Feb 26 to Feb 27, signaling renewed confidence in further upside towards $3,500.
- ETH remains on track to hit $3,500 as long-term holders stay profitable, but downside risks persist due to extreme leverage if bulls are proven wrong.
Ethereum‘s ETH price has surged above $3,275, its highest level since April 2022. ETH funding rates have also recovered after a brief dip, signaling renewed confidence in further upside.
Bullish Traders Raise Leverage 300% Amid Dencun Upgrade and Soaring ETF Volumes
There were initial concerns that weakening demand could derail the crypto market rally when the Bitcoin ETF opened on Feb 26. However, as the Bitcoin ETF saw record trading volumes on Tuesday, bullish signals filtered through to ETH traders.
Additionally, Ethereum developers announced March 13 as the scheduled date for the mainnet launch of the much-anticipated Dencun upgrade, which is expected to increase network throughput and optimization. As anticipated, Ethereum traders reacted positively to these bullish events.
The Coinglass Funding Rates metric shows that the ETH funding rate dipped to 0.02% on Feb 26 but rapidly rose to 0.06% on Tuesday, 300% higher than the previous day. This surge suggests traders are increasingly confident in near-term upside, offering higher fees to keep LONG contracts open.
Unsurprisingly, ETH price reached a new yearly peak within hours of the funding rate spike. The strong rebound in funding rates and leverage suggests Ethereum traders are regaining conviction in driving prices towards $3,500 next.
ETH Price Forecast: Coasting Towards $3,500
The 300% spike in ETH funding rates between Feb 26 and Feb 27 indicates that the price will likely advance towards $3,500 soon.
IntoTheBlocks’ data shows around 80% of current ETH holders are in profit. These holders may be unwilling to sell, further fueling the rally. The 103 million addresses that acquired 21.86 million ETH at an average of $3,300 could be the next key resistance.
However, if this level breaks down, a rally above $3,500 could happen if bullish futures traders are correct. But if prices drop below $3,000, the extreme leverage could trigger heavy losses from margin calls and LONG squeezes.
Conclusion
In summary, Ethereum price remains on track to reclaim $3,500 as long-term holders stay in profit. However, the risks are tilted to the downside if bullish traders are proven wrong, given the heightened leverage.
