Ethereum ($ETH) fell by more than 3% to below $2,700 on Thursday as cryptocurrency traders took profits following the market’s recent advance.
The pullback came after $ETH encountered resistance around $2,786. Although its daily price structure remains broadly constructive, derivatives participation and mainnet activity have not increased as quickly as the price.
That divergence presents a mixed outlook. Cautious leveraged positioning may indicate that traders lack conviction in the rally, but it also reduces signs of excessive speculation and leaves room for open interest to expand if demand strengthens.
Ethereum Open Interest dips below $35 billion
Ethereum-denominated open interest has remained relatively stable since the short squeeze recorded in late August.
Open interest measures the total value of derivatives contracts that have not been closed or settled.
Rising OI can indicate that traders are committing additional capital, while a decline may show that positions are being closed or liquidated.
Ethereum has gained approximately 70% since establishing its late-June low. Over the same period, dollar-denominated open interest increased around 60% to $34.8 billion.
Part of that increase is a mechanical result of $ETH becoming more valuable. Even if the number of outstanding $ETH contracts remains unchanged, their dollar value rises with the token’s price.
The slower growth in open interest relative to the price reinforces the view that the rally has not been driven primarily by an influx of leverage.
That could be interpreted positively because spot-led advances may be more sustainable than moves dominated by borrowed capital.
However, it also shows that derivatives traders remain cautious despite $ETH’s strong recovery.
If open interest begins increasing alongside a price breakout, it could provide additional momentum. Rapid growth in leveraged long positions would also increase downside risk if $ETH reverses.
Network activity has also failed to match Ethereum’s price performance. The number of active addresses has remained broadly unchanged during the past three months.
This metric counts unique onchain addresses participating in transactions over a given period and can provide an indication of user activity.
Ethereum’s total mainnet transaction count has declined during the same period. Historically, sustained bull markets have often coincided with rising address activity and transaction demand.
Greater network use can reflect increasing participation in decentralized finance, stablecoin transfers, non-fungible tokens and other applications.
The present divergence therefore raises questions about whether the price recovery is being supported by improving Ethereum fundamentals.
Finally, Ethereum’s decline triggered approximately $111.70 million in derivatives liquidations over 24 hours, according to CoinGlass.
Long positions accounted for $97.6 million of the total, showing that traders expecting further gains absorbed most of the losses.
A long liquidation occurs when the market falls far enough that a leveraged bullish position no longer satisfies its margin requirements.
The exchange then closes the position automatically, creating additional selling pressure.
The imbalance indicates that some traders had increased bullish exposure near the recent highs despite the broader open-interest data remaining relatively subdued.
Liquidations can accelerate a decline in the short term. Once the most vulnerable leveraged positions are removed, however, the market may stabilize if spot buyers return around support.
Ethereum technical forecast: $ETH tests the $2,626 support
Ethereum’s daily chart retains a bullish bias because the price remains above several important exponential moving averages.
Following its rejection at $2,786, the first significant support sits just above $2,626. This former horizontal level will be the immediate test for buyers seeking to preserve the short-term uptrend.
Below $2,626, a demand zone forms around the 20-day EMA at $2,549 and horizontal support near $2,544. The proximity of those levels could make the $2,544–$2,549 region a stronger defensive area.
Further support is located around $2,431, followed by the 50-day EMA near $2,368. A sustained decline below those levels would significantly weaken the current bullish structure.
On the upside, $ETH must first reclaim $2,786. A confirmed breakout could open a path toward the next resistance at $2,894, followed by the larger barrier around $3,177.
The Relative Strength Index and Stochastic Oscillator are cooling after briefly entering overbought territory.
That suggests momentum is easing, although the reset could provide a healthier foundation for another advance if support holds.
For now, $2,626 is the key level. Defending it would keep Ethereum’s recovery intact, while a breakdown could extend the correction toward the 20-day EMA.
