Ethereum (ETH) Bulls Are Still Weak, Will Bears Press On?

Ethereum is steady at press time, as is visible in the daily chart. Even though prices are floating above $2,500, ETH bulls are still weak.

Ethereum (CRYPTO: ETH) price is showing signs of stability at press time, as depicted in the daily chart. Despite trading above the $2,500 level, ETH bulls appear to be losing steam.

The coin is still trading within the bear bar of August 27, which indicates a bear formation.

Based on price action, it seems like it will take some effort for the bulls to gain control in the short term. A high volume close above $3,500 would be a strong indication of a rapid trend shift, which would benefit ETH holders.

Afterward, one analyst believes the short to medium term projection for the second-most valuable coin is bearish.

The analyst stated in an analysis that over the last few months, the funding rate in Ethereum perpetuals across exchanges like Binance and OKX has been positive but falling, according to CryptoQuant data.

Through perpetual platforms, Ethereum traders can place positions using leverage, essentially borrowing from the exchange. The more leverage they have, the more they have to borrow, narrowing their safety margin and increasing the risk of liquidation.

Depending on the prevailing price action, the funding rate in these perpetual markets can be positive or negative. Whenever the funding rate is positive, the outlook among leveraged traders is bullish.

In this case, they expect prices to rise higher. For equilibrium, traders posting long positions have to pay those who are selling.

Conversely, a negative funding rate means the prevailing sentiment is bearish, and the markets could fall further. In this event, short sellers must pay those posting buys.

Looking at the price trend over the past few months, the analyst notes that the funding rate for Ethereum perpetuals has been consistently falling, though still in the positive territory. This state of affairs means that, though ETH has been wavy, moving even to $3,900 in May, the dominant sentiment is bearish.