Looking at the chart above, Ethereum open interest rose to $13.08 billion when the price peaked at $2,628 on Tuesday, October 15th. But since then, rather than doubling down on that rally, ETH traders have started closing out their positions.
Notably, total ETH open interest has now declined to $12.77 billion as of writing on October 17, reflecting over $310 million worth of capital outflows within the past 48 hours. are.
Ethereum price risks further correction in the short term
When key resistance levels are tested and open interest begins to decline, strategic investors often interpret this as a short-term bearish signal for two main reasons.
- Unreliable: First, decreasing open interest despite price being close to resistance often suggests that traders are losing confidence in the upward momentum. Instead of anticipating a breakout, many people choose to book profits or cut losses, thereby reducing their exposure.
This move indicates that buying pressure is waning and could prevent further price increases.
- Bulls deploying risk-averse strategies: Second, the decrease in open interest may reflect the unwinding of leveraged positions. When traders exit these positions, it typically signals a shift toward risk aversion and an expectation of increased volatility or potential downside in the short term.
In the case of Ethereum, the $2,628 price point appears to be a formidable resistance level, raising the possibility of a retracement absent sustained bullish momentum or new capital inflows.
Therefore, unless new buyers step in to support the $2,600 breakout attempt, Ethereum becomes vulnerable to a short-term decline to lower support levels, potentially closer to the $2,500 range. Possibly.
Ethereum price prediction: $2,570 drop could increase downward pressure
Ethereum appears poised for further declines if it fails to sustain the current support at $2,570. The price has already returned 4.18% from the recent high of $2,628, showing clear signs of weakening bullish momentum.
The RSI is currently hovering around 58.46, suggesting that Ethereum has room to fall further before reaching oversold conditions, increasing the likelihood of a more severe correction.
