Ethereum (ETH) may be nearing the end of its price correction, as the second-largest cryptocurrency by market cap continues to trade slightly above $4,000, following a strong sell-off last week when it almost crashed to $3,400.
According to a CryptoQuant Quicktake post by contributor PelinayPA, Ethereum funding rates on Binance crypto exchange have remained positive, despite being in a narrow range. This shows that long positions on ETH still dominate the market.
For example, during the 2021-22 bull cycle, ETH funding rates often surged to 0.1% to 0.2%, aligning with local market tops. At present, these funding rates are hovering around 0.01% to 0.03%, implying that the market has not reached overheated levels just yet.
In addition, the absence of negative funding rates confirms a decline in short positioning, and elevated risk appetite among investors. The CryptoQuant analyst added:
The overall trend remains upward. Low funding rates combined with strong price momentum suggest that the correction is likely complete. In the short term, minor profit-taking or sideways consolidation between $3,600–$3,800 would be natural. If funding rates gradually rise above 0.05%, it could signal overcrowded longs and trigger a short term pullback.
The current combination of moderate levels of leverage and gradually rising spot demand hints toward a potential ETH rally, eyeing the $4,500 to $5,000 range in the long term. The price target could be even higher with a favorable derivatives structure and funding dynamics.
That said, a sharp increase in funding rates could be seen as an early warning of another price pullback for the cryptocurrency. However, ETH’s market structure still supports a potential surge to $6,800 by the end of 2025, the analyst concluded.
