Ethereum (ETH) has faced significant resistance following a brief rebound above the $1,600 threshold on Tuesday, leading to a sharp drop to $1,450. The altcoin's persistent underperformance in 2024 has shaken investor confidence, triggering substantial selling pressure in recent weeks.
Bearish Sentiment Grows on Binance
Bearish sentiment toward Ethereum is escalating across crypto exchanges—particularly on Binance, the world's largest cryptocurrency trading platform. Blockchain expert Darkfost highlighted that ETH's open interest (OI) on Binance continues its steady decline.
A sustained drop in open interest signals cooling derivatives market activity for ETH and reflects growing caution among traders as the altcoin struggles to maintain bullish momentum.
Key Observations:
- Binance’s ETH open interest has plummeted nearly 50% since December 2024, erasing ~$4 billion.
- Current OI stands at $3.1 billion, underscoring a dramatic shift in investor sentiment.
- The metric now trades below its 365-day Simple Moving Average (SMA), suggesting reduced speculative activity.
👉 Why Ethereum’s Open Interest Matters for Traders
Darkfost warns that this trend—coupled with elevated liquidation risks—could prolong ETH’s price instability. Traders are advised to monitor funding rates and market volatility for potential reversal signals.
Market Reactions and Analyst Predictions
Despite the downturn, some analysts anticipate a rebound:
- Milkybull Crypto projects a macro bottom forming at ~$1,485, with a long-term target of **$10,000**.
- ETH’s current price ($1,585 as of reporting) historically aligns with accumulation zones preceding major rallies.
FAQ Section
Q: What does declining open interest indicate?
A: It suggests reduced trading activity and liquidity, often signaling bearish sentiment or trader indecision.
Q: How does Binance’s OI drop affect ETH’s price?
A: Large OI reductions typically correlate with increased selling pressure and short-term price declines.
Q: When might ETH recover?
A: While timing is uncertain, key indicators to watch include stabilization in OI, positive funding rates, and higher low formations on price charts.
👉 Ethereum Trading Strategies for Volatile Markets
Featured image from Unsplash; chart via TradingView.
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