Ethereum traders appear to be engaging in extreme FOMO trading, creating a predictable pattern in which regional price highs and lows coincide with extreme funding rates, according to a Thursday tweet from analytics firm Santiment.
The data reveals a clear cycle.
đź“Š Ethereum falls to $3.7,000 and traders are showing signs of panic. Over the past two months, each exchange’s funding rate has determined where $ETH goes next. When the big longs become dominant (greedy), the price will correct. If major shorts dominate, a rebound is more likely. pic.twitter.com/3s47hlDgZr
— Santiment (@santimentfeed) October 30, 2025
In early September, the gross funding rate entered negative territory and hit a domestic low. Liquidations were initially dominated by longs. Ethereum According to CoinGlass data, it fell from $4,900 to $4,500.
By September 12, Ethereum had risen 11.5% to $4,700, liquidating short sellers and pushing funding rates further into positive territory, marking a local high. The same pattern continued several weeks later, with Ethereum dropping to $3,800 on October 30, sending funding rates into negative territory and liquidating approximately $954 million of longs, according to Santiment analysts.
“These fluctuations in funding rates are fueling emotional short-term trading, especially as traders tend to go long aggressively during small pullbacks and short during short-term pullbacks,” said Ilya Otichenko, principal analyst at CEX.IO. decryption.
Otichenko added that this feedback loop amplifies volatility and obscures the true direction of the market. “Traders are reacting to each other’s leverage rather than true buying and selling demand, which creates volatility in the market.”
Furthermore, analysts believe that the Ethereum derivatives market is showing signs of stress, with open interest increasing despite the price decline.
“This setup typically suggests that leverage, rather than genuine buying demand, is sustaining the market,” Otichenko explained.
He observes that investors are looking to buy on the dip, and “if momentum doesn’t change, the market is exposed to a sharp decline.”
In the short term, Otichenko expects Ethereum to remain range bound with a bearish bias unless funding and positions are reset. “Breaking this cycle will likely require an increase in spot demand rather than a further leverage-driven push.”
In the medium term, virtual currency markets may become volatile in response to changes in geopolitical and macroeconomic policies. However, over the long term, analysts remain bullish on an improving macro environment, including the Fed’s easing cycle. decryption Previously reported.
About the prediction market Myriad launched by decryptionUsers are cautiously optimistic about Ethereum, according to its parent company Dastan, which puts a 61% chance of Ethereum’s next move to $4,500 instead of $3,100.
Ethereum has fallen 1.5% in the past 24 hours and is currently trading at $3,834, recovering from an intraday low of $3,687, according to data from CoinGecko.
