Expert Identifies Key Condition for Ethereum’s ‘Parabolic’ Surge

Ethereum traders’ sentiment requires a slight nudge for the asset’s price to embark on a ‘parabolic’ rise, according to CryptoQuant.

Analysts noted that such a scenario will become possible when the funding rate for perpetual ETH contracts exceeds 0.015%. In this case, “the calm will turn into a storm,” they added.

“To witness another parabolic rise in ether, we need positive signals. Support from the futures market plays a crucial role in such rallies,” the review stated. 

The current Ethereum funding rate of ~0.0056% is comparable to what was observed in September 2023 before the indicator’s sequential rise to levels above 0.015%, experts indicated.

Returning to this level “is crucial for tracking healthy growth during bull markets.” 

Since September 2, the price of the second-largest cryptocurrency by market cap has been unable to rise above $2500—a critical resistance for traders, according to Cointelegraph. If breached, shorts worth $576.28 million could face liquidation, as per Coinglass.

Factors of Weakness

Coinbase explained Ethereum’s lag behind competitors as a result of the current market structure combined with weakening on-chain metrics.

According to specialists, after a wave of risk aversion in August, many investors are “stuck” in altcoins and other assets. This has “delayed” capital that would otherwise flow through the broader ecosystem into networks like Ethereum.

“For ether to catch up, it needs new narratives. These could once again ignite enthusiasm among developers and investors,” experts emphasized.

Analysts noted the potential of spot Ethereum ETFs as support amid greater institutional focus on similar Bitcoin-based products.

“Many traditional players remain far from understanding Ethereum’s issuance schedule and the utility of smart contracts,” specialists lamented.

Back in earlier reports, Derive founder Nick Forster deemed a return of Ethereum to its ATH unlikely by the year’s end.