Ethereum (ETH) has struggled to capitalize on the recent bullish momentum in the cryptocurrency market, failing to make significant upside moves. Analysis by ShayanBTC, a contributor to CryptoQuant, highlights key factors affecting Ethereum's performance and its path forward.

Funding Rates Signal Waning Trader Interest

A major factor impacting Ethereum’s momentum is fluctuations in funding rates, a critical indicator of demand in the derivatives market. While these rates initially spiked during the crypto rally, they sharply declined after Ethereum hit resistance at $4,000.

The initial spike in funding rates suggested cautious optimism among traders, but the subsequent drop reflects waning interest and reduced commitment. This raises concerns about the sustainability of the bullish trend.