Ethereum is currently displaying tentative signs of relief following weeks of relentless downside pressure, although the recovery remains precarious. The asset is grappling to decisively break through the $3,400 resistance level, which has thwarted several attempts to rebound in recent weeks. Despite a short-term uptick in sentiment that reflects broader market stabilization, analysts caution that Ethereum could still face further downturns if momentum wanes or broader macroeconomic conditions sour.
Compounding the situation, new derivatives data reveals a resurgence of risk in the market. According to a recent report, Ethereum’s open interest on Binance has surged to approximately $8.6 billion, marking its highest point since October 9.
This increase follows a dramatic contraction witnessed in October, when open interest plummeted from above $10 billion to below $7 billion within a few days. This quick liquidation event wiped out excessive leverage from the market, forcing traders into a more cautious stance.
The current rise in open interest suggests that traders are gradually re-entering the market and establishing positions at lower price levels. However, this also amplifies the asset’s sensitivity to rapid price fluctuations.
Ethereum Derivatives Activity Rebuilds Confidence
Ethereum is currently testing a critical resistance zone around the $3,400 mark, and the latest derivatives activity offers essential insight into this price behavior. The spike in open interest on Binance reflects a renewed appetite for leverage among traders, indicating a shift away from the defensive posture seen after the October liquidation.
Notably, this increase is occurring while ETH trades near the $3,300–$3,400 range—significantly below its previous cycle highs—suggesting traders are not chasing prices at extremes, but instead building positions at relatively discounted levels. Historically, such positioning tends to indicate expectations of medium-term price gains as opposed to short-term speculation.
Moreover, the fact that open interest has climbed to its highest level since October 9, without reaching prior overheated extremes, points to a more balanced recovery. If this growth is driven by steady inflows rather than aggressive leverage, it could indicate a healthier market structure emerging from the fallout of the post-liquidation phase.
Nonetheless, risks remain skewed near resistance levels. A rapid increase in open interest while prices stagnate below $3,400 could heighten volatility risks. For Ethereum to maintain momentum, it is crucial that both price and open interest stay aligned, confirming that confidence is returning without pushing limits too far.
Price Faces Key Resistance Level
Examining Ethereum’s price action on the daily chart reveals an asset attempting to recover but still hampered by substantial structural resistance around $3,400. After a notable decline from early October highs, ETH established a local bottom below $2,900 and has since been forming higher lows, indicating a period of stabilization instead of a definitive trend reversal.
Currently trading near $3,300, multiple technical indicators are converging at this level. The descending 200-day moving average and prior horizontal support-turned-resistance are exerting significant pressure on any upward movement. Previous attempts to rally into this resistance zone have met selling pressure, underscoring its importance as a supply region. The inability to reclaim the $3,400 level decisively keeps the broader market structure leaning towards neutral-to-bearish.
On the downside, the rising short-term moving average and recent higher lows around $3,000–$3,050 provide initial support. As long as ETH stays above this range, the market maintains a constructive consolidation pattern instead of reverting to the earlier downtrend. Volume levels during this recovery remain moderate, reflecting controlled participation rather than aggressive speculative buying.
Ethereum is caught in a narrow range between rising short-term support and declining long-term resistance. This price behavior often precedes a directional shift. A decisive daily close above $3,400 could signal a change in market dynamics, paving the way for a broader recovery.
