Ethereum funding rates in 2022 reflected a year of significant transitions and challenges in the cryptocurrency market. The average 8-hour funding rates ranged from notably negative to positive values, illustrating the shifting market dynamics and sentiment throughout the year.
The first quarter of 2022 began with cautious optimism for Ethereum. January saw an average rate of 0.00474%, with significant daily fluctuations. The month started strong but experienced volatility, reaching a low of -0.00949% on January 26th as Ethereum's price dropped below $2,500.
February maintained a positive but slightly lower average rate of 0.00394%. The month saw fewer extreme fluctuations, with rates generally staying between -0.01143% and 0.01%.
March experienced an uptick in positive sentiment, with the average rate rising to 0.00641%. The month saw several days with rates at or near 0.01%, particularly in the latter half, coinciding with Ethereum's push towards $3,500.
The second quarter saw a gradual decline in funding rates. April began with a decreased average rate of 0.00181%, reflecting growing market uncertainty. The month witnessed several days of negative rates, particularly towards the end, as Ethereum struggled to maintain support above $3,000.
May saw a slight recovery with an average rate of 0.00425%. However, the month experienced extreme volatility, with rates plummeting to -0.02552% on May 12th, the lowest point of the year so far, coinciding with the broader cryptocurrency market crash.
June marked a significant cooldown with the average rate dropping to 0.00108%. The month saw several days of negative rates, particularly in the latter half, reflecting the market's pessimism as Ethereum's price fell below $1,000.
The third quarter began with signs of recovery. July's average rate increased to 0.00449%, with daily rates generally fluctuating between -0.01488% and 0.01%. This period aligned with Ethereum's price recovery above $1,500.
August saw a dramatic shift, with the average rate dropping to 0.00080%. The month started positively but ended with a series of negative rates, reaching -0.01665% on August 28th as Ethereum's price struggled to maintain support above $1,500.
September marked a significant downturn, with the monthly average plummeting to -0.01648%, the lowest of the year. The month saw unprecedented negative rates, reaching an extreme low of -0.18712% on September 15th. This period coincided with Ethereum's successful transition to Proof-of-Stake (The Merge) and the subsequent "sell the news" event, pushing prices below $1,300.
The final quarter of 2022 witnessed a gradual recovery in funding rates. October started cautiously with an average rate of 0.00252%. Daily rates were less volatile compared to September, generally fluctuating between -0.00383% and 0.00857%.
November saw a slight setback with the average rate turning negative at -0.00324%. The month experienced some volatility, with rates dropping to -0.03878% on November 10th amid the FTX collapse, but showed signs of recovery towards the end of the month.
December marked a return to positive territory with an average rate of 0.00421%. The month saw more stable rates, often approaching 0.01% in the latter half. This period aligned with Ethereum's price stabilization around $1,200, setting a foundation for potential recovery in the new year.
The year 2022 demonstrated the volatile nature of Ethereum funding rates, reflecting the broader cryptocurrency market's challenges. From the initial optimism in Q1 to the summer recovery, the Merge-related volatility in September, and the gradual stabilization in Q4, funding rates provided a clear reflection of the market's roller-coaster journey. These fluctuations coincided with Ethereum's price movement from around $3,700 at the start of the year to approximately $1,200 by year-end, highlighting the significant transitions and challenges faced by the second-largest cryptocurrency.
