After holding the key support near $2250 for two days, Ethereum [ETH] sellers regained the market control, accelerating further downward. The level was the last support holding the structure after the altcoin fell outside the range it had been trading in since the last week of September.
The altcoin’s downward momentum continued before halting near the $2400 support. Bulls then regained momentum, igniting a rebound back above $2500 at $2519. Since then, the upside momentum has stalled near the $2500 mark.
Meanwhile, the spot volume has been declining dramatically, as weekly ETF outflows still remain high near $542 million, suggesting demand remains weak. Heavy liquidations, dominated by leveraged longs, further accelerated the decline.
Therefore, looking ahead, $2,408 remains critical, as another breakdown below that support could expose $2,350–$2,400.
Conversely, reclaiming $2,560 would signal improving demand and open a recovery toward $2,625, potentially restoring confidence and reducing downside pressure.
ETH Open Interest signals liquidation risk
Elsewhere, Ethereum’s price recovery now faces another hurdle. According to Alphractal’s derivatives positioning data, major traders’ confidence is declining.
The 30-day and 180-day open interest deltas are both negative, which represents that long-term open interest for leveraged positions will continue to decrease.
Moreover, the whale-versus-retail delta also remains negative. Therefore, it simply implies that whales are supporting less bearish trading compared to retail buyers.
This shift matters because ETH still carries approximately 10.58 million ETH, worth roughly $12.9 billion in total open interest. As such, this represents a significant amount of potential volatility should the price suddenly move.
That aside, the latest reading shows a negative delta near 940,000 ETH according to Alphractal data, reinforcing the scale of positioning pressure.
Consequently, another decline may lead to new liquidation and increased selling. On the other hand, less exposure to sell-offs may reduce volatility when Ethereum becomes stable and traders build their position cautiously.
Bitfinex ETH longs surge
Ethereum’s recent sell-off has not stopped every trader from betting on a rebound. However, Bitfinex’ long positions have risen to almost $283,405 with an extreme rise in positive bets for ETH as it tries to bounce back.
The concentration of such positioning indicates that some traders believe the loss will be seen as a buy signal rather than the beginning of larger declines. Still, the bets carry a significant risk since both RSI readings have climbed above 82, indicating extremely stretched momentum.
If ETH fails to sustain its recovery, these leveraged longs could face pressure to exit, potentially adding fresh selling. Conversely, continued price strength could reward early buyers and encourage further bullish positioning.
The key question is whether actual demand can support this aggressive bet before profit-taking or a reversal undermines it.
Final Summary
-
Ethereum risks further losses below $2,430, with $2,560 key to recovery.
-
ETH faces liquidation risk as Bitfinex longs surge toward $283,405.
Be the first to comment