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

Ethereum's price fluctuations are influenced by cycles of extreme greed and fear among traders, driven by leverage rather than genuine market demand. Analysts note that this volatility is compounded by emotional trading patterns, where funding rates dictate price movements. Recent data indicates a cycle of funding rates transitioning from negative to positive as traders react to market highs and lows. After a recent drop to $3,800, funded long positions were liquidated en masse, highlighting the dependency on leverage. Analysts suggest the market's underlying demand needs to improve to break the current cycle of volatility. In the short term, the bearish trend is likely to continue until there is a significant increase in spot buying activity. Despite current market pressures, long-term sentiment remains bullish due to a potential easing macroeconomic environment. Currently, Ethereum is trading around $3,834, indicating a minor recovery but still facing resistance from high funding rates and leveraged positions.

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