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Illiquid ETH, Bullish Futures Pave Possible Path To $5.5K

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Takeaways from the conference:

  • The Ether market is bullish because more than 70% of its supply has already been staked.

  • In August, Ether whales generated more than 411 000 ETH.

  • Binance ETH’s futures open interest is still above $8.4billion despite $4,300 retest.

EtherETHIn August, the price of ETH (and other cryptocurrencies) reached a record high at $4,950, driven by a broad-market momentum, and inflows into spot ETFs. The exchange dynamics and the supply dynamic indicate that behind this rally there is a mixture of caution on short term and bullish signals for long-term.

CryptoQuant Data shows Binance’s ETH reserve grew dramatically in August. The increase in reserves is usually an indication of profits being taken as new coins are introduced into the market. It is possible that some ETH investors are reentering market. 

The Binance illiquid vs liquid supply of Ether. Source: CryptoQuant

The majority of ETH is still illiquid or in long-term or staking holdings. This creates a structural shortfall that helps support the bullish view. This analysis stated:

“The most likely scenario for September is a sideways-to-slightly-bullish move between 4.3k and 5k. If the 4.8k resistance is broken and sustained, we could see 5.2k–5.5k.”

A changing landscape can be seen in whale flow patterns. Glassnode data show Mega whales who held more than 10,000 Ethereum were the driving force behind August’s rally, with net flows reaching a peak of over 2.2 million in just 30 days. That accumulation has now stalled, while large whales (1,000–10,000 ETH) have returned to buying, adding more than 411,000 ETH over the same period. The rotation of the market shows that even though large holders have paused their activities, demand is still there.

Cryptocurrencies, Markets, Cryptocurrency Exchange, Derivatives, Binance, Price Analysis, Futures, Market Analysis, Ether Price, Ethereum Price, Ethereum ETF
Ether Whale positional change. Source: Glassnode/X

Related: Spot Bitcoin ETFs surge, Ether funds bleed as investors flee for safety

ETH futures signal conviction despite price dip

ETH futures data adds further context. Amr Taha is a crypto analyst noted Binance has maintained its open interest above $8.4 billion despite ETH dropping below $4,300. The same level was seen on August 30, 2018.

The resilience of the market suggests that traders remain steadfast, betting either on a recovery or remaining unfazed if further price falls occur.

Cryptocurrencies, Markets, Cryptocurrency Exchange, Derivatives, Binance, Price Analysis, Futures, Market Analysis, Ether Price, Ethereum Price, Ethereum ETF
The change of Ether’s price and open market interest in the last 24 hours. Source: CryptoQuant

Slowing contractions are also evident. Open interest had fallen by 6.25% during the first week of this month, but it has since risen to 3.4%. The drop is indicative of a cooling in deleveraging. Binance’s Net Taker Volume remains Negative, which indicates sellers have control. The stability of open interest, however, shows buyers are taking on a large portion.

While the spot flow continues to reduce supply. Binance and Kraken withdraw more than 120,000 ETH a day. This reinforces the narrative of illiquidity and reduces future depth.

Related: ETH staking entry queue surges to two-year high as institutions accumulate

The article is not intended to provide investment advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making a final decision.