{"id":27358,"date":"2022-08-28T20:25:40","date_gmt":"2022-08-28T20:25:40","guid":{"rendered":"http:\/\/egrowonline.com\/?p=27358"},"modified":"2022-08-28T20:25:40","modified_gmt":"2022-08-28T20:25:40","slug":"ethereum-funding-rates-drop-to-14-month-low-short-squeeze-in-the-making","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=27358","title":{"rendered":"Ethereum Funding Rates Drop To 14-Month Low, Short Squeeze In The Making?"},"content":{"rendered":"


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On-chain data shows the Ethereum funding rates have now declined to the lowest value in 14 months, something that could pave way for a short squeeze in the market.<\/p>\n

Ethereum Funding Rates Reach Highly Negative Value<\/h2>\n

As pointed out by an analyst in a CryptoQuant post<\/a>, the ETH funding rates are currently at their least value since July 2021.<\/p>\n

The \u201cfunding rate<\/a>\u201d is an indicator that measures the periodic fee that traders in the Ethereum futures market are exchanging between each other right now.<\/p>\n

When the value of the metric is negative, it means short traders are paying a premium to the long traders in order to hold onto their positions. This trend generally hints that a bearish sentiment is more dominant in the market currently.<\/p>\n

On the other hand, positive values of the indicator imply longs are overwhelming the shorts at the moment. Naturally, such a trend suggests the majority sentiment is bullish.<\/p>\n

Now, here is a chart that shows the trend in the Ethereum funding rates over the past fifteen months or so:<\/p>\n

\"Ethereum<\/p>\n

Looks like the value of the metric has been a deep red in recent days | Source: CryptoQuant<\/a><\/pre>\n
As you can see in the above graph, the Ethereum funding rates have declined recently, and have now hit highly negative values.<\/p>\n
The indicator\u2019s current values are the lowest they have been since the July of last year, around fourteen months ago.<\/p>\n
Back then, these values lead to a big short squeeze<\/a> taking place in the market that pumped the price of the crypto up.<\/p>\n
In a short squeeze, a swing up in the value of Ethereum while the market is overleveraged liquidates a large amount of shorts. These liquidations push the price up even higher, leading to more shorts being flushed down. In this way, liquidations cascade together during a squeeze.<\/p>\n
Related Reading:  Ethereum Price Plummets 9% As Fed Chair Passes Hawkish Remarks<\/a><\/em><\/strong><\/p>\n
Generally, highly positive funding rates can lead to long squeezes (since there are more longs in the market), while negative ones may result in shorts getting squeezed.<\/p>\n
If the same trend as 14 months ago repeats this time as well, then it\u2019s possible Ethereum could reverse using a short squeeze this time as well.<\/p>\n
ETH Price<\/h2>\n
At the time of writing, Ethereum\u2019s price<\/a> floats around $1.4k, down 7% in the last seven days. Over the past month, the crypto has lost 10% in value.<\/p>\n
The below chart shows the trend in the price of the coin over the last five days.<\/p>\n
\"Ethereum<\/p>\n
The value of the crypto seems to have plummeted down over the last couple of days| Source: ETHUSD on TradingView<\/a><\/pre>\n
Featured image from DrawKit Illustrations on Unsplash.com, charts from TradingView.com, CryptoQuant.com<\/pre>\n<\/div>\n

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Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"
On-chain data shows the Ethereum funding rates have now declined to the lowest value in 14 months, something that could pave way for a short squeeze in the market. Ethereum Funding Rates Reach Highly Negative Value As pointed out by an analyst in a CryptoQuant post, the ETH funding rates are currently at their least […]<\/p>\n","protected":false},"author":1,"featured_media":27359,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[41],"tags":[10767,1371,158,901,1131,1739,1426,2310],"class_list":["post-27358","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ethereum","tag-14month","tag-drop","tag-ethereum","tag-funding","tag-making","tag-rates","tag-short","tag-squeeze"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"http:\/\/egrowonline.com\/wp-content\/uploads\/2022\/08\/drawkit-illustrations-8iIUDnRq87o-unsplash-scaled.jpg","_links":{"self":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/27358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27358"}],"version-history":[{"count":1,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/27358\/revisions"}],"predecessor-version":[{"id":27360,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/27358\/revisions\/27360"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/media\/27359"}],"wp:attachment":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27358"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}