Ethereum has risen back above $2,000 following a softer-than-expected U.S. CPI report, leading traders and analysts to debate whether the worst is over or if this is just a temporary relief rally.
Data indicates that futures open interest has dropped significantly over the past month, funding rates have turned deeply negative, and certain on-chain metrics point to a key support zone below current prices.
Open Interest Decline Sparks Debate
CryptoQuant reports a notable 80 million ETH drop in open interest across major exchanges, suggesting large positions were closed rather than new ones opened. While the scale of the change warrants some scrutiny—as reporting errors or mislabeled data can occur—a substantial reduction in futures exposure on platforms like Binance, Gate, Bybit, and OKX appears confirmed.
Funding Rates Signal Bearish Sentiment
Funding rates on some platforms have reached levels not seen in nearly three years. When traders pay to hold short positions, it reflects strong bearish conviction. Historically, such extremes have often preceded sharp reversals, as seen in late 2022. However, markets can remain one-sided longer than expected, so a reversal is not guaranteed.
Support Zones and Technical Outlook
Glassnode’s on-chain data highlights a significant cost-basis support area between $1,880 and $1,900, where roughly 1.3 million ETH changed hands. The $2,000 level serves as a psychological anchor, reinforced by moving average clusters. A breakout from the recent falling wedge pattern suggests an initial target near $2,150, with further resistance around $2,260 and $2,500. Whether these levels are reached will depend on broader market sentiment and Bitcoin’s direction.
Lower open interest reduces the near-term risk of cascading liquidations, which could help stabilize intraday volatility. Meanwhile, deeply negative funding rates indicate that bearish bets remain active and could face a squeeze if momentum shifts. Reports also note increased inflows into accumulation wallets during recent dips, signaling longer-term confidence among some investors.
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