Crypto Beginner

Inflation, rate concerns drag down Ether metrics

Ether funding rates drop

Global markets—crypto and equity—have been on a slippery slope after Fed Chair Jerome Powell focused on the need to raise interest rates further to tame inflation. While our latest market update enlists the key developments post the symposium held at Jackson Hole on Friday, Ether was impacted the most— courtesy of the changing token metrics.

What does a drop in ETH funding rate indicate?

While most crypto assets took the hit, it turned out to be a double whammy for Ethereum. Along with the ETH prices which corrected over the weekend, the ETH funding rate too dropped, according to data released by CryptoQuant. For perspective, the current funding rate is the lowest in the past 14 months, signifying bearish sentiments among ETH traders.

When funding rates were this low in June 2021, a short squeeze on Ether and BTC followed.

Deposit contracts too at a month-low

ETH 2.0 contracts involving staking deposits reached a month-low of $19,475,077,788, as reported by Glassnode. The drop in deposit contract volume might be a bearish indicator ahead of the upcoming merge. A drop in funding rates and deposit contracts was expected given the low liquidity in the market post-Jackson Hole annual policy speech and ETH’s 12% drop over the weekend.

Here is the Glassnode tweet for your reference:

Despite key ETH metrics retreating ahead of the big event, the growing influence of macro factors alarms traders the most. Ether is closely correlated to the S&P 500 index, with the correlation even higher than that of Bitcoin, as per data released by Santiment. Considering the market situation, we can expect higher volatility at Ether’s counter in the near term.

Currently, the negative macro influence seems to be shadowing optimism surrounding the merge.

Article Default Disclaimer

Share this:

Table of Content

Recent Post

Subscribe to our newsletter

Weekly crypto updates and insights delivered to your inbox.

Browse our Newsletter Archive for past editions.

SnowSnow

Thank you for subscribing!
Please verify your email to start receiving the latest issues from Switch in your Inbox.
Powered by

Build your crypto portfolio on the
CoinSwitch app today

Scan the QR code below or find us on Google Play
Store or Apple App Store.

Build your crypto portfolio on the
CoinSwitch app today

Scan the QR code below or find us on Google Play Store or Apple App Store.

2 Crore+ users trust CoinSwitch, India's safest crypto platform | 180+ Coins | ISO 27001 Certified | FIU Compliant