Ethereum fell below the $2,800 level after a keen and sudden drop, deepening market panic and reinforcing the feeling that bulls have lost control. The recent decline has pushed investors into defensive mode, and some analysts are now openly discussing the possibility of a broader bear market. Selling pressure has intensified in the cash and derivatives markets and volatility continues to raise as investors struggle to find a reliable support zone.
A up-to-date CryptoQuant report by Darkfost highlights one of the most alarming developments: interest in Ethereum Binance has been steadily degenerating for over three months. After reaching an all-time high of $12.6 billion on August 22, open interest has now halved. Nearly $6.4 billion in derivative positions evaporated, reducing ETH’s open interest to $6.2 billion, a keen decline of 51%.
While this seems like an extraordinary decline, Darkfost notes that open interest has only just dropped below the previous record high of $7.7 billion. This highlights how speculative and overextended the derivatives market has become in 2025 – and suggests Ethereum may be undergoing a much deeper structural reset than most expected.
Stock market speculation unfolds as Ethereum enters a deep reset phase
Dim Fost emphasizes that 2025 has been the most speculative phase in Ethereum’s history, fueled by aggressive leverage, rapid inflows, and a market structure that has proven to be much less strong – and much less sustainable – than it appeared during the rally. The collapse of open interest on Binance is only part of the story.
The same pattern is unfolding across the major derivatives platforms, revealing a broader structural trend rather than an exchange-specific phenomenon.
On Gate.io, interest in open cryptocurrencies dropped from $5.2 billion to $3.5 billion. In the case of Bybit, the decline is even more grave, reaching from $6.1 billion to $2.3 billion. This synchronized contraction shows how aggressively speculative positions were washed out. Meanwhile, the ongoing correction has dragged Ethereum’s price from $4,830 to $2,800, a keen 43% decline from its highs.
This widespread reduction in leverage suggests that the market is undergoing a deeper reset than typical corrections. Investors are in no rush to reopen positions, especially as liquidations continue to accumulate on stock exchanges.
While degenerating open interest negatively impacts near-term momentum and sentiment, Darkfost notes that such aggressive deleveraging could ultimately aid rebuild healthier market fundamentals – one that can sustain a sustainable bottom for ETH.
ETH loses key trend support as 3-day structure turns completely bearish
Ethereum’s 3-day chart shows a definite breakdown in structure, with the price currently trading well below the 50 SMA, 100 SMA, and 200 SMA for the first time since overdue 2024. The rejection from the $3,600-$3,800 region triggered a sturdy downward momentum, sending ETH directly through all the major moving averages and confirming a shift towards a downtrend on the higher timeframe. The current trading zone around $2,800 reflects a critical test of previous support, but momentum remains delicate.
The 50 SMA has now broken below the 100 SMA, while both are starting to converge lower towards the 200 SMA – a setup that usually precedes sustained corrections. Volume has increased on red candles, showing that sellers are still dominant and there is little evidence of aggressive buying on the dips. The recent candle wick towards $2,700 highlights sensitivity rather than strength, suggesting buyers are hesitant to defend this level strongly.
ETH is also making a series of lower highs and lows, further confirming the bearish market structure. If $2,750 breaks clearly, the next significant liquidity zones will be around $2,550 and $2,300, where previous consolidations developed at the beginning of the cycle.
Featured image from ChatGPT, chart from TradingView.com
