As Ethereum set to hit a new All-Time High (ATH) price at $2,000, data have shown that retail traders are optimistic as pro- traders are skeptical about ETH’s short-term prospect of reaching $2,000.
Ethereum move above $1,900 led to excessive leverage from futures contract buyers which made the funding rate rise above 0.17 percent.
Ethereum perpetual contracts have an embedded rate usually charged every eight hours. When buyers (longs) are the ones demanding more leverage, the funding rate turns positive. Therefore, the buyer will be the ones paying up the fees.
This rate is equivalent to 3.9 percent per week and an indication of extreme optimism. Although a hefty premium might be acceptable for short periods during market rallies, it eventually forces longs (buyers) to reduce their positions.
Ethereum price eyes $2,000 as crypto market hit new ATH
24-hours ago, Ethereum price hit an all-time high of $1,920. At press time again, the altcoin surged to $1,933 hitting another new ATH as it prepares to hit $2,000. The move marks a gain of 1 percent in less than 24-hours.
Ethereum’s gains have been greater than Bitcoin’s over the past 24 hours as it has not moved a great deal since it first topped $1,800 on Feb. 9. The altcoin price now is less than 5 percent from $2,000.
However, in 2018 when Ethereum first broke the $1,000 barrier, it surged all the way to $1,425 a week after but did not stay there long. That year also, ETH price collapsed almost 95 Percent to around $80 in December. It spent the next 18 months at lows between $100 and $270 with a brief spurt above that in June 2019.
Ethereum broke out of its long bear market in late July 2020 when it topped $400 for the first time in two years. By the end of the year, ETH was trading at around $700. Eight weeks since then, prices have surged a monumental 170percent to today’s levels.
The ATH high of the two top crypto assets (BTC and ETH) has driven market capitalization to a new peak of $1.2 trillion according to Coingecko. It has almost doubled since the beginning of the year and is now almost double the previous 2018 peak of $830 billion.