Ethereum is showing early signs of recovery after Friday’s dramatic sell-off that sent prices tumbling to $3,450. The drop came in what analysts describe as the largest liquidation event in the history of the cryptocurrency market, wiping out billions of leveraged positions on major exchanges. While bulls briefly lost control during the panic, ETH has since begun to stabilize, with renewed buying interest emerging near key demand zones.
Related reading
Onchain analyst Maartunn pointed out that leverage is building up on Ethereum again, signaling that traders are returning to the market following the reset. According to its data, open interest in ETH has increased significantly over the past 24 hours, a sign that speculative activity is picking up as volatility cools. This renewed leverage could set the stage for another decisive move, fueling a short-term relief rally or inviting further liquidations if momentum fades.
The next few days will be crucial for Ethereum as the bulls attempt to reclaim the $4,000 level to confirm a sustainable recovery. Market sentiment remains cautious but optimistic, with onchain data showing large holders and institutions continuing to accumulate ETH despite the recent turbulence – a potential sign of long-term confidence in the asset’s resilience.
Leverage Returns on Ethereum: A Risky Resurgence in Market Activity
According to Maartunn, Ethereum Open Interest increased by +8.2% in the last 24 hours: a clear sign that leverage is returning to the market. This rapid increase comes just days after the largest liquidation event in cryptocurrency history, where over-leveraged traders were wiped out during the sudden collapse. Now, it seems many are looking to “get their money back,” reigniting short-term volatility and speculation among stock exchanges.
Maartunn notes that while these so-called “revenge pumps” often create strong intraday rallies, they rarely sustain long-term momentum. Historically, around 75% of such leverage-driven rallies tend to reverse, leading to new pullbacks once liquidity and funding rates normalize. Only around 25% manage to extend into long-lasting bullish trends, generally if supported by new spot purchases or renewed institutional inflows.
This data highlights the precarious balance that Ethereum currently faces. The jump in open interest signals a resurgence in market participation, but also introduces the risk of another wave of forced liquidations if traders overextend their positions. For now, ETH’s near-term recovery remains largely fueled by derivatives activity rather than spot demand.
The next few days will be crucial in determining the direction of Ethereum. If the price sustains above the $4,000 region on sustained volume, it could confirm that the bulls are regaining control. However, a sudden drop in open interest or sharp spikes in funding could signal that the rally is overextended, setting the stage for another correction.
Related reading
Ethereum Rebounds, But Resistance Looms Future
Ethereum is showing a solid recovery after last week’s dramatic sell-off that pushed prices all the way to the $3,450 level. The daily chart shows that ETH has quickly recovered from the 200-day moving average (red line), establishing itself as an important area of demand. The price is now consolidating around $4,150, attempting to build momentum after a strong bullish candle on high volume, a potential signal that buyers are regaining control.
However, ETH faces immediate resistance near the $4,250–$4,300 zone, which coincides with the 50-day moving average (blue line). This area previously served as strong support and reclaiming it would be essential to confirm a return to the bullish structure. The 100-day moving average (green line) is now flattening, reflecting cautious market sentiment following the massive liquidation.
Related reading
If the bulls can maintain the price action above $4,000, the next targets would be around $4,500 and possibly $4,750. Conversely, failure to hold the 200-day moving average could open the door to a deeper retest at or below $3,600. For now, Ethereum’s recovery remains technically constructive, but it must break above these resistance levels to confirm that the recent bounce is more than just a short-term reaction to oversold conditions.
Featured image from ChatGPT, chart from TradingView.com
**mindvault**
mindvault is a premium cognitive support formula created for adults 45+. It’s thoughtfully designed to help maintain clear thinking