The price of Ethereum has been on a remarkable run in the past week, returning above the $3,500 level for the first time since July 2024. This single-week performance represents a change in the fortunes of the “king of altcoins,” which somewhat slowed down after a great start to the month of November.

While the current price layout for Ethereum suggests that there is still room for upward movement, certain on-chain signals indicate that the market might be on the cusp of a pullback. One of these signals is the ETH open interest, which recently hit a new all-time high.

Is ETH Price At Risk With Surging Open Interest?

In a Quicktake post on the CryptoQuant platform, an analyst with the pseudonym ShayanBTC has revealed that while the Ethereum price trajectory looks bullish at the moment, investors need to tread with caution. This projection is based on the “alarming divergence” in the ETH futures market metrics.

Related Reading

Specifically, the relevant futures market metric here is the open interest, which tracks the total amount of open futures or derivatives contracts of a particular cryptocurrency (ETH, in this case) in the market at a given time. It basically evaluates the amount of money being poured into Ethereum futures at every moment.

According to data from CryptoQuant, the Ethereum open interest has reached a new all-time high value of $17 billion. Typically, surging open interest signals a shift in investor sentiment, with traders increasingly speculating and gearing for a potential market movement.

ShayanBTC, however, noted that the notable spike in open interest was not accompanied by a new all-time high for the price of Ethereum. According to the Quicktake pundit, this divergence between the price and the open interest points to a potential increase in volatility and significant liquidation cascades.

ShayanBTC added:

If Ethereum’s price faces a sudden downturn or consolidation, the overleveraged positions from futures traders could trigger a wave of forced liquidations, leading to rapid price declines.

As of this writing, the price of Ethereum sits just beneath $3,700, reflecting an over 3% increase in the last 24 hours. According to data from CoinGecko, the altcoin’s value is up by nearly 8% in the past seven days.

Ethereum Whales Load Their Bags

Fortuitously, another on-chain data has emerged to counter the bearish prognosis for the second-largest cryptocurrency. In a November 30 post on the X platform, prominent crypto analyst Ali Martinez revealed that a particular class of Ethereum large investors has been active in the market. 

Related Reading

Data from CryptoQuant shows that Ethereum whales holding between 100,000 and 1,000,000 coins have purchased over 280,000 ETH in the past four days. This level of buying activity from such an influential class of investor could be considered bullish for the altcoin.

Featured image created by DALL-E, chart from TradingView

On-chain data shows the Ethereum Exchange Supply Ratio has continued to move flat around 2016 lows, a sign that may be bullish for ETH.

Ethereum Exchange Supply Ratio Has Been At Lows Recently

In a CryptoQuant Quicktake post, an analyst has talked about the recent trend in the Ethereum Exchange Supply Ratio. The “Exchange Supply Ratio” is an on-chain metric that keeps track of the ratio between ETH’s Exchange Reserve and its total supply in circulation.

The “Exchange Reserve” here refers to a measure of the total amount of the cryptocurrency that’s currently sitting in the wallets connected to centralized exchanges.

When the value of this indicator goes up, it means the investors are depositing their coins to exchanges. As one of the main reasons why holders would transfer to these platforms is for selling-related purposes, this kind of trend can have a bearish effect on the asset’s price.

On the other hand, the metric registering a decline suggests a net amount of the supply is exiting from the exchanges. Generally, investors take their coins off into self-custodial wallets whenever they plan to hold into the long-term, so such a trend may turn out to be bullish for ETH.

Now, here is the chart shared by the quant that shows the trend in the Ethereum Exchange Supply Ratio over the past decade:

The value of the metric appears to have been stale in recent months | Source: CryptoQuant

As displayed in the above graph, the Ethereum Exchange Supply Ratio hit a peak back in 2020. During this high, the exchanges held more than 30% of the asset’s entire circulating supply.

Since then, however, the indicator has been in a constant decline, despite the fact that the asset’s supply has gone up. This means that the investors have pulled out coins at a rate exceeding the supply expansion.

This year, the metric has fallen to sideways movement, suggesting an equilibrium has been reached in the sector. Interestingly, this flat action has come despite the price appreciation that Ethereum has been enjoying.

The trend would naturally imply that not many investors of the cryptocurrency are ready to part with it yet. At the same time, though, a consistent accumulation like before isn’t happening, either, so it’s not like there aren’t any sellers at all.

Nonetheless, the fact that the indicator has at least remained in balance throughout this rally could be a positive sign for its sustainability. The metric could now be to keep an eye on in the future, just to make sure that the trend continues.

Any reversals to the upside would, of course, signal that the investors have started to sell, which may mean the Ethereum bull run could be approaching its climax.

BTC Price

At the time of writing, Ethereum is trading around $3,600, up more than 9% over the last week.

Looks like the price of the coin has been moving up over the last few days | Source: ETHUSDT on TradingView

Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

Ethereum is grappling with a critical resistance level at $3,659 as momentum appears to wane. After a period of steady gains, the cryptocurrency has moved into a consolidation phase, with bulls struggling to push it higher. The pause has raised questions about whether Ethereum’s rally is losing steam or simply gearing up for its next big move.

This article aims to analyze ETH’s current consolidation below the $3,659 resistance level, focusing on its implications for market pressure. It will also determine whether ETH can regain its upsurge or if fading strength could lead to further declines through technical indicators, support zones, and potential breakout scenarios.

What Key Indicators Say About Ethereum’s Price

ETH is displaying strong bearish momentum on the 4-hour chart, with its price attempting a move toward the $3,360 level and the crucial 100-day Simple Moving Average (SMA). This key level could act as dynamic support, determining the next move. A rebound may follow a successful defense, while a break below could lead to more drops and test lower support zones.

An analysis of the 4-hour chart shows that ETH’s Relative Strength Index (RSI) has dropped to 56%, down from the overbought zone. This decline signals a reduction in buying pressure, suggesting a possible shift in market sentiment. As the RSI pulls back, it indicates that bullish sentiment may be fading, and the market could be heading for consolidation or reversal. If the RSI continues to fall, it would confirm increasing selling pressure, potentially leading to deeper corrections.

Related Reading

Despite staying above the daily 100-day SMA, Ethereum is showing bearish signs, with its price steadily declining toward the $3,360 level. While the 100-day SMA offers some support, the downward movement implies that selling pressure is dominant, weakening the bullish momentum. A continued decline could test the strength of the $3,360 support, and a break below it might lead to further losses, signaling a deeper market pullback.

Finally, the 1-day RSI indicates growing negative pressure on ETH since the signal line fell back to 65%, aiming to move toward the 50% threshold. As the RSI continues to drop toward this threshold, it shows that sellers are gaining dominance, possibly paving the way for additional declines unless buying pressure can return to shift the sentiment.

Will Ethereum Find New Support Or Sink Further?

A key level to monitor is $3,360, which has historically served as a strong support zone. If Ethereum can hold above this level, it could trigger a rebound, pushing the price toward the next resistance at the $3,659 mark.

Related Reading

However, should the price fail to maintain above $3,360, ETH may experience a notable downswing, with $3,051 emerging as the next key support range. A break below this support may open the door to additional downward movement, targeting even lower support zones.

Featured image from Unsplash, chart from Tradingview.com