Ether (ETH) has been on a positive trajectory over the past week, with the network’s dynamics showing some improvement. Crypto market analysts say there is still room for growth.

According to a report by CryptoQuant analyst Shayan, Ethereum futures market funding rates signal that ETH has not entered an overheated phase. Hence, the cryptocurrency may record additional gains in the coming weeks.

ETH Sees Positive Momentum

ETH hit a six-month high on November 28, rallying close to $3,700, a level last seen in early June. This surge to $3,680 led to an 18% weekly gain for the second-largest cryptocurrency; however, the asset had retraced to $3,540 at the time of writing, recording a measly 5% weekly gain.

Shayan said ether’s rally and surge past significant resistance levels reignited investor optimism and sparked community discussions of a new all-time high by the end of the year. Interestingly, funding rates, which reflect investor sentiment in the futures market, suggest ETH could hit a new high by the end of 2024. This metric also highlights the potential for short-term risks.

The spike in Ethereum funding rates reveals heightened demand for long ETH positions; however, they remain below levels recorded when ETH hit its all-time high of $4,890 three years ago. This shows that the cryptocurrency is not yet overvalued and does not face the risk of a major correction.

“Historically, sharp spikes in funding rates often precede sudden market corrections or liquidation cascades, leading to periods of heightened volatility. However, the current funding rate levels imply that there is still room for further growth in both price and sentiment before such risks become critical,” Shayan stated.

Ethereum Price Outlook

Earlier this week, a CryptoPotato ETH price analysis report stated that ETH breaking through the resistance level of $3,500 could be the onset of a significant rally. However, the cryptocurrency still faces the possibility of continuing its consolidation phase.

While ether saw a significant surge above $3,500 on Wednesday, the cryptocurrency has remained above that level since then, with a 4% plunge from $3,680. This indicates that ETH is currently consolidating. It remains to be seen if the coin will continue consolidating or move upwards, driven by flows into the U.S. spot Ethereum exchange-traded funds market.