CryptoQuant views the unwinding of leveraged positions in Ethereum positively, but is waiting for USDT inflows to Binance and demand from the U.S. to recover before bullish expectations strengthen.
At the time of the analysis, Ethereum was trading at around $2,439; it was down 6.5 percent over the past seven days and 5.2 percent over the past 30 days. The overall assessment of on-chain indicators also remained neutral.
The dollar value of Ethereum open interest on Binance stands at around $6.1 billion. The chart shared shows this amount at approximately 5 percent below the 30-day average. High liquidations of long positions and a funding rate close to zero are linked in the analysis to the unwinding of leveraged positions and a healthier market structure.
Which two signals are being watched for a rally?
The first indicator is stablecoin liquidity on Binance. As USDT reserves decline and net stablecoin flows fall to around negative $175 million, more funds left the exchange than entered it during the period examined. This weakness in liquidity available for buying is limiting the positive outlook.
The second indicator is the Coinbase Premium. The index, which tracks the price difference between Coinbase and Binance, stands at negative 0.11 percent in the chart shared. The analysis links this to weak demand from the U.S., particularly institutional demand.
According to the assessment, a renewed strengthening of USDT inflows to Binance and the Coinbase Premium turning positive are among the conditions that could shift the outlook for Ethereum in a bullish direction.
Exchange supply is declining as network activity slows
The decline in ETH reserves held on Binance and the low share of supply on the exchange point to easing selling pressure. The fact that approximately 36 percent of Ethereum’s supply is staked is also among the factors the analysis views positively.
By contrast, the number of transactions on the network and the transaction fees burned are declining. This suggests that the unwinding of leveraged positions alone is not enough to create strong expectations for a rally: The improvement in market structure also needs to be accompanied by new buying power and demand.
Not investment advice.