Ethereum Open Interest Plunges—Is a Major Rally Beginning After Leverage Flush?

▲ Ethereum (ETH)

Ethereum (ETH) has cleared out excessive leverage from the market and restored a healthy supply-demand structure, laying the groundwork for a strong technical rebound.

According to cryptocurrency media outlet NewsBTC, open interest in the Ethereum market has recently declined sharply alongside a price correction, completing a leverage reset. Virtual asset analysts assessed that the large-scale liquidation of speculative long positions has, in fact, produced a positive outcome by removing obstacles that had been suppressing price gains. Despite overall market volatility including Bitcoin (BTC), Ethereum has been consolidating at its bottom range and building momentum for a rebound.

On-chain data analytics firm Santiment reported that Ethereum’s open interest has fallen to its lowest level in recent months. As excessive speculative demand has exited the market and the proportion of long-term investors backed by spot holdings has increased, the market’s fundamentals have strengthened. Experts predict that with a clean chart formed after the deleveraging process, price elasticity in response to renewed buying pressure could be maximized.

During the recent volatility, Ethereum briefly fell below the $2,000 level but alleviated concerns of further decline as funding rates stabilized. Historical data shows that whenever open interest bottomed out, it was consistently followed by a powerful price surge. Analysts noted that the current oversold phase appears to be ending, supply-demand imbalances are easing, and downside rigidity has solidified.

Continued capital inflows into spot Ethereum ETFs, a cornerstone of institutional adoption in the digital asset sector, are expected to serve as a key driver of the market rebound. Institutional investors view the current price range—following the removal of leverage-driven froth—as an attractive accumulation zone and are actively increasing their holdings. Market participants are closely watching for a recovery in trading volume and the formation of golden crosses among major moving averages to signal a full-fledged trend reversal.

Ethereum has strengthened its fundamentals through ecosystem expansion and improved supply-demand health, positioning itself for the next bull market. With excessive leverage cleared, market volatility has converged to a manageable level, creating optimal conditions for new capital inflows. Ethereum is expected to build on current support levels, lead a rebound, and spearhead a broader recovery across the digital asset market.

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