Ethereum is trading below $1,700 as the market faces a key test that will determine whether the current level remains support or gives way to further deterioration. The price has already fallen about 28% from recent levels – and a CryptoQuant analyst has identified a development in derivatives data that places the current weakness in a structural context that extends well beyond short-term price action.
The most significant signal is not the price decline itself, but how open interest reset on major exchanges during the decline. The derivatives positioning that built up throughout 2025 and into 2026 is unwinding – and the scale of this unwind has now returned several venues to levels last seen in April 2025, erasing over a year of leveraged exposure in a compressed time frame.
On Gate.io, ETH Open Interest fell from $4.84 billion on May 7 to $2.68 billion on June 9, a reduction of about $2.16 billion, or about 45%, in just over a month. The current figure almost exactly matches the $2.67 billion recorded on April 11, 2025. Bybit shows an identical trend, with open interest close to $805 million, which almost matches the $795 million level on April 9, 2025.
Two major exchanges simultaneously returned to the April 2025 market structure. The leverage accumulated throughout the following period has been absorbed. Binance’s funding rates going negative confirms that the remaining futures activity does not express bullish conviction – it expresses uncertainty at best and a slight bearish bias at worst.
Funding tells the real story
CryptoQuant analysis identifies asymmetry between sites as the detail that prevents the open interest reset from being interpreted as clean structural compensation. Both Gate.io and Bybit returned to April 2025 levels – leverage accumulated over more than a year of market activity was wiped out in a matter of weeks. Binance has not followed the same path. ETH open interest on Binance remains around $2.76 billion, remaining near its upper range, while other major venues have contracted sharply around this range.
Binance’s retained positioning does not automatically signal a bullish intention to remain in the market. The financing rate tells a more accurate story. At around -0.0038, Binance funding has turned negative again: traders are not paying a premium to hold long exposure. Open Interest is present, but the belief behind it has shifted from directional to defensive.
Ethereum Funding Rates Binance | Source: CryptoQuant
This combination creates the specific market message identified by the report. The derivatives reset is real but uneven: some exchanges have eliminated leverage entirely while Binance maintains its positioning in a funding environment that reflects caution rather than confidence. Negative funding during a price decline describes one of three conditions: defensive positioning by participants covering existing exposure, short pressure from traders betting against recovery, or simply the absence of aggressive buying conviction from participants who might otherwise pay to maintain bullish exposure.
None of these three conditions describes a market preparing to recover. Together, they describe a derivatives structure that has partially reset while the larger platform holds residual positioning without the directional engagement that would make that positioning constructive.
Ethereum Breaks February Lows – Can Bulls Defend Last Major Weekly Support?
Ethereum is trading near $1,670 after suffering one of its most severe weekly breakouts of the cycle, with the price now falling below February lows and reaching levels not seen since early 2023. The move is significant because it invalidates the wide trading range that contained ETH for most of 2026 and confirms the continuation of the bearish pattern that has developed since the rejection of the 4 cycle peak $800.
Ethereum consolidates below $1,700 level | Source: ETHUSDT chart on TradingView
From a market structure perspective, the chart is defined by a clear sequence of lower highs and lower lows. After failing to hold above the $2,250-$2,350 resistance zone, Ethereum lost the critical $1,800 support zone that previously served as a consolidation floor from February to March. This breakdown triggered a rapid move towards the $1,500 region, where buyers finally stepped in to avoid a deeper collapse.
The most important detail is that ETH is now trading below all major weekly moving averages. The 50, 100, and 200-week moving averages are well above the current price, reinforcing the strength of the current downtrend and creating significant resistance.
The recent low near $1,500 now represents the most important support level on the chart. If buyers are able to defend this zone, Ethereum could attempt to build a base and reclaim up to $1,800. However, a weekly close below recent lows would expose the market to a deeper retracement towards the $1,300-$1,400 region, extending the correction and confirming further deterioration in long-term market structure.
Featured image from ChatGPT, chart from TradingView.com
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