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Analysts at CryptoQuant highlight that funding rates on the major exchanges are much more moderate than during Ethereum’s two major rallies earlier this year.
At those previous peaks, funding rose to extreme levels, revealing euphoric long positioning and overheated sentiment that often preceded sharp reversals. The current cycle looks different.
ETH has recovered strongly from the recent pullback to the mid-$2,800 region. However, funding is modest, suggesting the market is driven by spot accumulation rather than speculative leverage.
This suggests that traders have not yet started aggressively chasing this move, as we saw during previous breakouts. For Ethereum to replicate these expansions, funding rates must increase as demand increases. Until that happens, the rally reflects a recovering market rather than a euphoric one.
 On the positive side, the current situation leaves room for further upside potential if buyers act with conviction. However, the same subdued conditions also mean that momentum can quickly fade if resistance persists.
Meanwhile, signals from market structure reinforce the idea that Ethereum is regaining strength. ETH/BTC and ETH/USD have both broken out of multi-week ranges, a pattern that historically marks the start of ETH-led phases rather than a simple follow-up to Bitcoin.
Negentropic, co-founder of Glassnode, noted that dominance has regained the 50-day moving average, and trend momentum remains higher.
The last two times ETH showed this structure, it accelerated instead of drifting, supporting the argument that the bearish window for major altcoins has closed.
However, broader ecosystem sentiment is divided. October’s $254 million ETF inflows reinforced the bullish narrative, although rising social dominance prompted warnings that euphoric talk could signal a near-term top.
Analysts note that Ethereum’s trajectory will likely depend on the Fusaka upgrade, ETF approval timelines, and whether whales maintain their recent $500 million accumulation streak.
If these catalysts align, ETH could attempt to make a move towards the Fibonacci extension at $4,800. However, failure of key resistance around $3,500 would keep the market cautious heading into the first quarter of 2026.
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