Ethereum funding rates were hit after the merger was completed. The event was the most anticipated update in the network’s history, and it affected both pricing and funding rates in adverse ways. However, with the market starting to settle into Ethereum’s new normal as evidence of the equity network, things are starting to stabilize. One of these rates is the return of funding rates to pre-merger levels.
stable funding rates
The days before the Ethereum merger were very volatile for the crypto market. Ethereum itself bore the brunt of this, and although the days before the upgrade were full of positive movement, it changed quickly.
Ethereum funding rates fell on the back of the merger. It had fallen from trending just below neutral levels at about 0.02% to minus 0.35% by the time the upgrade was final. It also comes after the sell-off that rocked the market at the same time. In the days leading up to the merger, FTX longs saw a total of 9.92% driven by short positions to hedge their positions on the exchange.
ETH funding rates recover | Source: Arcane Research
However, not long after the consolidation was completed, the market started to experience a recovery. This recovery was just as sharp as the decline, returning from minus 0.35% to about 0.02% by September 16th. This sharp upward trend appeared in the price of the digital asset, which has held most of its value during this time. This shows that despite the sell-off, there are still a large number of Ethereum holders who maintain a long exposure to the digital asset.
Ethereum may recover
With funding rates back to pre-merger levels, it shows that there is still an uptrend among investors. This ongoing uptrend continues to support the price of the digital asset even during a bear market.
Since most of the selling was caused by the hype around the merger, it is only natural that Ethereum will start to stabilize once most of the hype has now subsided. It leaves aggregators at a point where they can purchase digital assets without sacrificing much of their former value.
ETH price drops below $1,300 | Source: ETHUSD on TradingView.com
So far, with the FOMC-inspired volatility in the market, ETH support continues to rise. Drainage outflows over the past 24 hours show a trend of increasing accumulation. Outflows were almost 40% higher than ETH inflows for the day, according to Data from Glassnode.
If ETH can maintain its support level at $1250, this point will act as a rebound point for the digital asset. If ETH succeeds in breaking the resistance at $1,300, a retest of $1,500 is possible next week.
Featured image from Currency.com, charts from Arcane Research and TradingView.com
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