Interest In Drastically Reduced ETH, What's Up With Ethereum?

ETH crypto asset. (Photo; Doc. Cryptomanist)

JAKARTA - Ethereum (ETH), the world's second-largest digital asset after Bitcoin, has experienced a significant decline in the derivative market. ETH's decline is in the spotlight of the crypto community because it has the potential to change market sentiment towards these crypto assets.

On the other hand, the Ethereum spot market continues to show stable activity, a decline in the derivative market giving a different signal. Recent reports reveal that interest in buying through futures contracts and derivatives has declined sharply, especially as reflected in the decline in the Funding Rate.

Launching AMB Crypto, the Funding Rate is one of the important indicators in Futures trading, which shows the cost of holding a buying or selling position (short). Data from CryptoQuant shows that Ethereum's Funding Rate hit its lowest all year, signaling that traders prefer to sell or close their buying positions.

In this scenario, the decline in the Funding Rate could be a sign of bearish market sentiment, where traders prefer short positions and pay those who hold long positions to keep their contracts open.

Potentially Influence ETH Prices On Spot Market

This decline could be due to several factors, including global market uncertainty or concerns about the development of digital asset regulation. Furthermore, with the additional pressure from the derivative market, the price of ETH in the spot market could also be affected. At the time of writing, the negative ETH Funding Rate shows that traders are more speculating about price declines in the future.

With the Funding Rate continuing to decline, demand to buy Ethereum with leverage is decreasing. The price of Ethereum is currently still moving in the range of $2,300 (Rp35,600,000) based on CoinGecko data. Although ETH is facing pressure with this negative sentiment, analysts expect a further drop if interest from derivative market players does not recover in the near future.