Ethereum Relief Rally Masks Derivatives Weakness as Open Interest Falls

Source: CryptoNewsNet Original Title: Ethereum Relief Rally Masks Derivatives Weakness as Open Interest Falls Original Link:

Overview

The Ethereum price shows a bullish rebound from the support trendline of a triangle. The contraction in OI suggests forced liquidations of leveraged long positions as the downtrend strengthened. ETH’s fear and greed index at 35% highlights a fear sentiment among market participants.

On Wednesday, January 2, 2026, the Ethereum price bounced over 2.6% to reach its trading value of $3,015. The renewed buying pressure followed geopolitical developments and policy announcements. However, the uptick is still considered a short relief rally to recuperate the exhausted bearish momentum before the next breakdown. The latest on-chain data further accentuated the selling pressure from large investors, accelerating a risk of prolonged correction.

Whales Move 110K ETH as Ethereum Price Corrects

Over the past week, the Ethereum price plunged from $3,400 to a current trading value representing a 15.68% decline. Consequently, the asset’s market cap plunged to $363.6 billion. The downswing was primarily triggered by geopolitical tensions affecting market sentiment.

However, the open interest associated with ETH futures contracts also retraced from $41.67 billion to $38.4 billion, projecting a 7% drop. The loss of open interest can be attributed to forced liquidation of long positioned traders as the market downtrend accelerated.

In addition, traders likely exited their existing positions to reduce exposure to leveraged trades, withdrawing speculative force from the market.

Analyst reports indicate that big holders are making major shifts as over 110,000 ETH tokens have been moved in the last nine days, indicating that large participants are making active changes through the volatility. Historically, whale exits have often coincided with major market tops and aggressive corrections in price.

The derivative data and whale behavior show uncertainty and traders’ active withdrawal from the ETH market. If the trend persists, the coin price would face additional pressure, signaling a risk of prolonged correction.

Ethereum Price Shows Bull Cycle With Triangle Pattern

With today’s price jump, the ETH coin shows a bullish rebound from the $2,880 floor. This level coincides with a support trendline intact since June 2025. The dynamic support has acted as the major accumulation zone for buyers to recoup their exhausted bullish momentum.

In addition, the support trendline contributes to the formation of a symmetrical triangle. The chart setup is characterized by two converging trendlines that drive short-term consolidation in price.

The sideways action within the two converging trendlines allows traders to build sufficient momentum for the next breakout.

As the Ethereum price rebounds from the pattern’s bottom trendline and climbs 11% to challenge the overhead trendline, a potential breakout from this resistance will accelerate the bullish momentum for sustainable recovery ahead.

On the contrary, the downtick in daily exponential moving averages (20, 50, 100, and 200) suggests the path of least resistance is down toward a bearish trend ahead. The momentum indicator RSI at 40% further accentuates the bearish momentum in price.

If the Ethereum price breaks below the bottom support, sellers could chase the bottom support level at $2,600.