After recovering the $2,000 mark, Ethereum is showing signs of strength and derivatives market data is currently showing a major shift in sentiment. The recent market-wide selloff appears to have caused traders to quickly turn to risk, as evidenced by the surge in leveraged long positions seen in funding rates on major exchanges.
It's all about the money
BitMEX Signals. $ETH Most notably, funding has moved into extremely positive territory. A positive funding ratio typically indicates strong bullish belief and aggressive leverage expansion, but it also indicates that long traders are paying short to maintain open positions. The fact that Binance's funding moved from negative to neutral territory at the same time suggests that panic positioning and selling pressure is waning.
But historically, this arrangement has presented both opportunities and risks. As analyst Amr Taha points out, even if increased leverage makes financing very positive, it is unlikely to sustain long-term gains. Rather, a sudden correction is often more likely, especially if price momentum stalls or general market conditions worsen. Ethereum's current structure shows a substantial improvement in sentiment, but it remains in a volatile recovery environment.
volume catches up
The increased volume indicates that traders are willing to re-enter the market after prices recently recovered from a severe oversold situation. However, the larger downward trend has not yet been fully refuted. $ETH It continues to trade significantly below its long-term moving average. If Ethereum can stabilize above $2,000 and gradually recover from the resistance levels between $2,400 and $2,600, a more robust recovery phase could emerge.
This may also increase confidence in other altcoins. That would confirm that the recent panic flash was a short-term trough rather than the start of a long-term bear market. However, if leveraged longs become overcrowded and momentum slows, the market could once again experience increased volatility as positions are unwound. Fundraising-driven rallies often come to an abrupt halt before more robust trends take over.
Ethereum is clearly back in recovery mode for the time being, but how the price moves over the next few sessions will determine whether this is a continuation of a long-term bull market or just a leverage-driven rally.
