The ETH funding rate has turned negative as its price dropped below $3,600, signaling a buying opportunity that retail investors are actively seizing, while Bitcoin struggles under $116,000.
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Retail investors absorbed most ETH long liquidations but promptly bought the dip at $3,600.
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ETH price rebounded to its average trading range, contrasting Bitcoin’s ongoing selling pressure below $116,000.
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COINOTAG analysis highlights negative funding as a key indicator for potential price recovery in ETH and BTC.
ETH funding rate turns negative below $3,600 as retail investors buy the dip. Stay updated on ETH and Bitcoin price trends with COINOTAG insights.
ETH Funding Rate Turns Negative Amid Price Drop Below $3,600
Ethereum’s funding rate shifted negative for the first time since late June as the price dipped below $3,600. This shift often signals a potential buying opportunity, confirmed by retail investors stepping in to purchase ETH during the dip. Despite significant long liquidations totaling $115.8 million in just five hours, the altcoin showed resilience by bouncing back toward its average trading range.
How Are Retail Investors Influencing ETH Price Movements?
Data from Hyblock reveals that retail traders bore the majority of long liquidations during the recent sell-off. However, these same investors quickly moved to buy ETH at lower levels, particularly around the $3,600 mark. Indicators tracking whale versus retail positions confirm retail traders remained net long during the liquidation event, highlighting their crucial role in stabilizing ETH’s price.
Strategic ETH reserve and spot ETH ETF balances. Source: StrategicETHreserve.xyz
Bitcoin Faces Selling Pressure Below $116,000 as ETH Shows Strength
While Ethereum demonstrated signs of recovery, Bitcoin encountered sustained selling pressure below the $116,000 level. Market reactions to recent geopolitical developments, including new tariffs announced by US President Donald Trump on multiple countries, contributed to Bitcoin’s decline. This divergence underscores ETH’s relative strength amid broader market uncertainty.
New Trump tariffs were announced on July 31. Source: Unusual Whales / X
What Does the ETH Liquidation Heatmap Reveal?
The ETH/USDT liquidation heatmap from Hyblock shows intense selling near $3,900, where short positions remain vulnerable. The price briefly tapped a critical liquidation level at $3,600, triggering significant long liquidations. This data highlights key price zones where traders face heightened risk, informing strategic entry and exit points.
ETH/USDT liquidation heatmap. Source: Hyblock
What Is the Significance of Negative Funding Rates for ETH?
Negative funding rates indicate that short sellers pay longs, often signaling oversold conditions. For ETH, this shift suggests traders expect a price rebound. Historically, negative funding has preceded upward price movements in both ETH and BTC, making it a critical metric for market participants.
ETH/USDT Binance 1-hr chart. Source: TRDR.io
How Do Whale and Retail Positions Compare During the Sell-Off?
Breaking down ETH’s cumulative volume delta shows retail investors (100 to 100K volume buckets) absorbed most of the liquidation impact, while whales (10,000 to 1 million buckets) maintained steadier positions. This dynamic suggests retail traders are more reactive to price swings, whereas whales hold longer-term stances, providing market stability.
ETH/USDT 15-min chart. Source: Hyblock
Key Takeaways
- ETH funding rate turned negative, signaling potential price recovery.
- Retail investors absorbed most long liquidations but quickly bought the dip at $3,600.
- Bitcoin faces selling pressure below $116,000, contrasting ETH’s relative strength.
Conclusion
The recent negative funding rate for ETH and the active buying by retail investors highlight a potential rebound phase for Ethereum despite short-term volatility. Meanwhile, Bitcoin’s struggles below $116,000 reflect broader market uncertainties. Monitoring these trends will be essential for traders seeking strategic entry points in the evolving crypto landscape.
Frequently Asked Questions
How does the ETH funding rate impact trading decisions?
The ETH funding rate influences trader sentiment by indicating whether longs or shorts dominate. A negative rate often signals a buying opportunity as shorts pay longs, encouraging entry at lower prices.
What caused the recent sell-off in Ethereum?
Recent sell-offs were triggered by significant long liquidations and external factors like new US tariffs, which increased market uncertainty and selling pressure on ETH.
