As Ethereum (ETH) hovers just above $4,300, a mix of optimism and caution permeates the crypto analytical landscape. Some experts note a robust structural health in Ethereum’s current trend, while others point to muted funding rates across exchanges, suggesting a lack of demand that could limit breakout momentum for the digital asset.
Ethereum’s Latest Rally Shows Structural Strength
A recent post by contributor ShayanMarkets on CryptoQuant highlights an intriguing observation regarding Ethereum’s funding rates during various market peaks. The funding rates across exchanges remain relatively subdued when contrasted with ETH’s last three significant highs. This raises questions about the current rally’s sustainability and the driving forces behind price movements.
Take, for instance, the first major peak observed in early 2024. During this period, funding rates for ETH soared to 0.8, indicating rampant long positioning and speculative interest. This excessive leveraging led to a quick price push followed by a sharp decline, as the market couldn’t sustain such high speculative demands. In contrast, during the second peak in late 2024, ETH closely mirrored previous price levels but was met with much lower funding rates. While this dampened excessive speculation, it also indicated a lack of sustained momentum needed for price growth, which ultimately took its toll on ETH’s value.
In a surprising twist, the 2025 rally has managed to achieve a new all-time high (ATH) of $4,900, even with relatively low funding rates. This divergence is noteworthy—it suggests that Ethereum is setting new records without the aggressive long positioning that characterized past rallies. ShayanMarkets articulates two key implications of this divergence: on one hand, the market appears to be more spot-driven and structurally sound, as it’s not being artificially inflated by excessive leverage. On the other hand, the soft demand environment limits breakout possibilities, underscoring the need for new order flows to spark further upward movement.
The analysis wraps up with an interesting observation—that despite achieving higher highs against a backdrop of declining funding rates, the current Ethereum market exhibits resilience against sudden liquidation cascades. Nonetheless, this resilience calls for strong buyer conviction to push ETH toward its next upward leg.
Is ETH Headed For A Correction?
Despite trading just 12% below its ATH, the question remains: could Ethereum be due for a correction? Analyst Ted Pillows has expressed concern, predicting that ETH could retrace to around $3,900 before finding its footing for the next rally. This raises alarms for many stakeholders interested in the leading smart contract platform.
Yet, it’s not all doom and gloom. Several data metrics point to a potentially bullish future for Ethereum. Recent figures reveal that the ETH exchange supply ratio on major platforms like Binance has hit a low of 0.037, signaling a crunch in supply that could work in Ethereum’s favor. Such a supply scarcity often leads to increased demand, boosting prices over time.
In a related development, Ethereum’s exchange balance has recently turned negative for the first time, indicating that more tokens are being withdrawn from exchanges than deposited. This trend may suggest a growing accumulation phase among investors, as they choose to hold onto their ETH instead of trading it. As ETH trades at $4,334, up 0.6% in the past 24 hours, the outcome of these metrics could heavily influence its next movement.
