Panic and Greed Are Shaping Ethereum’s Price: What’s Next?

Ethereum is experiencing a volatile cycle influenced by extreme shifts in greed and panic in funding rates, according to analysts. The current market is driven more by leverage rather than actual spot demand, making it difficult to ascertain the true direction of the market. The cycle features predictable patterns where local price tops and bottoms align closely with significant movements in funding rates. In September, a drop in Ethereum led to negative funding rates, followed by a brief recovery that amplified volatility. Analysts note that traders tend to react aggressively to short-term price movements instead of genuine demand, heightening market instability. Furthermore, increased open interest in Ethereum's derivatives market, despite falling prices, suggests that leverage is more influential than actual buying interest. Analysts recommend a reset in derivatives positioning and an increase in spot buying to stabilize the market. In the short term, Ethereum is expected to remain range-bound with a bearish outlook unless there’s a shift in funding dynamics. Longer-term forecasts remain cautiously optimistic due to favorable macroeconomic conditions.

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