Key takeaways
- While momentum indicators point to an easing of bearish pressure, ETH remains trapped below several key moving averages.
- Until buyers reclaim resistance levels above $1,800, the broader technical outlook remains cautious, with support around $1,741 likely to play a crucial role in determining the next major move.
ETH open interest drops to its lowest level in several weeks
Ethereum (ETH) derivatives markets remain weak after weeks of weak prices, reflecting a cautious attitude among leveraged traders.
After the price of Ethereum fell below the $1,800 level, open interest in futures contracts fell sharply, reaching 13.64 million ether on Sunday, its lowest level since early May.
Open interest It saw a modest rebound on Monday after Ethereum rebounded above $1,700, but overall participation remains well below recent highs.
Open interest represents the total value of outstanding futures contracts. Since May 28, Ethereum futures markets have seen a decline of around 2 million ETH in open interest, highlighting a strong decline in leveraged exposure and growing risk-off sentiment.
Funding rate data paint a similar picture of caution. Over the past two weeks, Ethereum Funding prices have fluctuated between positive and negative territory, indicating no clear conviction from bulls or bears.
Funding rates are periodic payments that are exchanged between long and short traders in the perpetual futures markets. Positive rates indicate a bullish sentiment, while negative rates indicate stronger bearish sentiment.
The market tone shifted significantly after the June 5 correction, pushing financing rates into negative territory after nearly a month of positive readings.
Although ETH has recovered modestly since then, bullish traders have struggled to regain control.
Spot market indicators provide little evidence of strong accumulation. Ethereum exchange reserves have declined modestly over the past two days, reversing part of the increase recorded last week.
While declining exchange balances can sometimes indicate accumulation, the movement is still too small to indicate strong demand.
Ethereum Price Analysis: ETH is trapped below major resistance
Ethereum continues to trade within a short-term bearish structure despite the recent stabilization.
On the 4-hour chart, ETH remains below the 20-day EMA near $1,794, the 50-day EMA near $1,955, and the 100-day EMA near $2,108.
The clustering of these moving averages above current price levels indicates that bullish attempts are still facing significant resistance.
Although the broader trend remains bearish, some technical indicators suggest that the downward momentum may be easing.
The Relative Strength Index (RSI) has risen towards the mid-50s, indicating that selling pressure is weakening but not yet indicating a bullish reversal.
In order for Ethereum to build a stronger recovery, the bulls must reclaim several important resistance areas.
Immediate resistance at $1,794 could set the stage for an extended rally towards the psychological $1,806 and $1,909 levels.
A sustained move above these levels would significantly improve Ethereum’s outlook.
On the downside, Ethereum is facing several important support areas. If the downtrend continues, immediate support will be seen at $1,524, with another demand zone at $1,405.
If selling pressure intensifies and these levels fail to hold, ETH could fall towards the next important support area near $1,156.
