The drop in Ethereum's MCA affirms the position that a big fall could be close. But relief could come to ETH after the downtrend.
However, traders do not expect the recovery to be anytime soon, as shown by the funding rate. As of this writing, ETH’swas -0.003%. Since perpetual futures contracts can be held indefinitely, it becomes very necessary to have the funding rate.
Funding rate is the amount of an asset paid between long and short-positioned traders with open contracts. When the funding rate is positive, it means that longs are paying too short to keep their position. In this case, traders’ sentiment is bullish. But a negative funding rate means that shorts are paying longs a funding fee. Here, like it was with ETH, the sentiment is bearish. So, the broader bias was for ETH to drop much below $1,500.For now, Ethereum may need to depend on other metrics besides its market-based indicators in the hope of recovery. One metric that comes to mind is the Ethereum burned supply.represents the cumulative sum of ETH incinerated since the implementation of the EIP-1559.
In EIP-1559, the base for transactions is not sent to any miner/validator. Rather, it is burned as a means to reduce ETH’s supply and improve its value in the long term.
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