After a slight rebound on Tuesday to the $1,600 threshold, Ethereum‘s price was faced with notable resistance, which led to a sudden breakdown to $1,450. ETH’s persistent weak performance this year has impacted investor conviction in the market, triggering significant selling pressure in the past few weeks.
Bearish Sentiment Toward Ethereum Grows On Binance
The bearish sentiment toward Ethereum has increased in crypto exchanges, especially on Binance, the world’s largest cryptocurrency exchange. Verified author and on-chain expert for CryptoQuant, Darkfost, revealed that ETH’s Open Interest (OI) on Binance continues to see a steady decline.
The persistent drop in open interest on the crypto exchange indicates that ETH‘s derivatives market is cooling down. It also reflects rising caution among investors and traders as the altcoin battles to sustain its bullish momentum.
Darkfost highlighted that the open interest on Binance continues to drop without stopping and is now changing under its 365 Simple Moving Average (SMA). This movement implies that speculative activity is pulling back as investors might be waiting for more certain signals before making a forceful comeback to the market.
After hitting an all-time high of $7.78 billion in December, the open interest on Binance has decreased by almost 50% between December and April, wiping out nearly $4 billion within the period. The chart shows that ETH’s open interest on Binance is now valued at $3.1 billion, suggesting a massive shift in investor sentiment on the platform.
According to the on-chain expert, Ethereum’s price has been significantly impacted by this sharp drop, and there are no indications that the ongoing downward trend will be stopping anytime soon. Furthermore, it reflects the magnitude of recent liquidations as well as a heightened aversion to risk among investors.
In the event that the trend continues, Darkfost noted that “Ethereum’s price is still far from entering a period of stability.” Thus, Darkfost has urged traders to monitor investors’ behavior on Binance, which remains a valuable indicator since the largest trade volumes across the market are regularly captured by the crypto platform.
ETH Is Poised For A Massive Upswing To New All-Time Highs
With ETH’s open interest decreasing on the largest crypto exchange and the market extremely volatile, this raises concerns about its price stability. Nonetheless, many crypto analysts are confident that a rebound could be on the horizon, which is likely to push the altcoin toward new highs.
Market expert and trader Milkybull Crypto shared a post on the X platform, outlining Ethereum’s potential to surge significantly in the upcoming weeks. At the time of the post, ETH was trading at $1,585, and the expert stated that the altcoin typically marks a macro bottom at this level. Should this level hold, Milkybull anticipates a huge rally, putting his next target at the $10,000 milestone.
Featured image from Unsplash, chart from Tradingview.com
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