Ethereum Adjusts After Nearly Surpassing ATH – Futures and Spot Show Two Contrasting Pictures

Ethereum has lost some of its upward momentum after nearly reaching an all-time high, reflecting a broader correction across the crypto market. The second-largest digital asset by market capitalization hit $4,776 last week, just shy of the record $4,878 set in 2021, before falling back. At the time of writing, ETH is trading at $4,280, reflecting a fall of 5.7% in the past 24 hours and nearly $500 lower than its recent peak. This decline comes as analysts closely monitor trading activity in the derivatives market. According to data shared by CryptoQuant's CryptoOnchain analyst, the number of individual investors participating in the Ethereum futures market has significantly increased in recent sessions. This active trading activity, along with the high open interest of (open interest), has sparked a debate about whether the market is approaching a breakout point. The Ethereum Futures Market Shows Signs of Overheating CryptoOnchain notes that the futures trading frequency of Ethereum has entered what he describes as "Many retail" and "Too much retail," thresholds that typically appear near the end of a strong bullish trend. "Retail participation has surged as ETH prices surpassed $4,500," he explained, adding that such conditions often lead to greater volatility and sudden declines. Supplementary indicators also support this cautious view. The analyst highlighted the Ethereum futures trading volume bubble map, which is currently showing large red bubble clusters near recent high price levels. He noted that these patterns often precede strong breakouts or rapid corrections when excessive leverage is unwound.

Meanwhile, the open interest (OI) on Binance futures has risen to nearly 12 billion dollars before falling back to around 10.3 billion dollars. Although still at a record high, the recent decline suggests that some traders may have reduced their holdings. "The expansion of open contracts at extremely high levels near the price peak may provide additional momentum for the next price increase or trigger sell-offs when the market reverses," CryptoOnchain wrote. He also pointed out that the buy/sell ratio of buyers on Binance remains below 1, indicating that selling pressure has dominated trading activity in recent days.

Market Fluctuation in Spot Trading Brings a Different Perspective Not all analysts view the current pullback as an immediate sign of market tension. In a separate post, CryptoQuant collaborator Woominkyu noted that the funding rate for perpetual ETH futures remains stable around 0. This is in contrast to the previous bull runs in 2020–2021 and early 2024, when funding rates surged above 0.05–0.10, signaling overly hot long positions.

"ETH has just surpassed the $4,200 mark, but the capital remains stagnant," Woominkyu explained. "This shows that the price increase is driven more by spot buying rather than leverage." According to the analyst, this move indicates a relatively healthier market environment compared to previous bull runs, as it reduces the risk of forced liquidations. He added that a funding rate increase above 0.05 will be a threshold to watch for a potential short-term peak.