Ethereum’s rebound has stalled under a dense cluster of resistance on the 4-hour chart. Large traders have been cutting long exposure and leaning toward the short side. Leverage across future
Ethereum is trading near $2,545 on Monday, October 12, after its recovery from last week’s sell-off stalled in the $2,560 to $2,570 zone, while derivatives data flagged by Joao Wedson of analytics platform Alphractal in an October 10 post suggests large traders have been cutting long exposure and leaning increasingly short. ETH has gained 1.37% over the past 24 hours yet remains 6.55% lower on the week, and with roughly 10.58 million ETH still tied up in open futures positions, the mismatch between fading whale conviction and heavy leverage, in Wedson’s view, leaves the second-largest cryptocurrency, now carrying a market capitalization of about $310 billion, exposed to another round of forced liquidations.
On the 4-hour chart, the bounce from the October 8 low of $2,406.50 has recovered 38.2% of the prior drop from $2,807.34, reaching a Fibonacci retracement level at $2,559.62 that usually serves as the first serious test for any relief move. Directly above it, the 50-period and 200-period exponential moving averages have converged at $2,567.44 and $2,567.69, and Monday’s push to roughly $2,570 was sold within the same candle, leaving a long upper wick that marks exactly where sellers stepped in.
ETH/USDT 4-hour chart. Source: Alexander Stefanov / TradingView
The two averages have also just crossed, with the 50 EMA slipping fractionally below the 200 EMA in what is technically a death cross on this timeframe. Because the gap between them amounts to cents, the signal describes a market stuck at resistance more than a confirmed downtrend, and two or three strong candles closing above $2,570 would erase it.
Momentum has improved considerably since the sell-off, when the relative strength index (RSI) fell below 20, meaning sellers had pushed price down faster than at any point in more than a month. The RSI now stands at 52.19, back above the neutral 50 line for the first time since the decline began, while the 20 EMA has turned higher and trails price at $2,532.25. Volume is where the recovery looks thin, since the buying bars on the way up are visibly smaller than the selling bars from October 7 and 8, a pattern more typical of a relief rally than of a fresh uptrend.
Open interest measures the total value of futures and perpetual swap contracts that have not yet been closed, and its delta tracks how that figure changes over a set window. Wedson pointed out that both the 30-day and 180-day deltas for ETH are negative, so positions have been shrinking over the past month and the past half-year alike, while Alphractal’s Whale vs Retail Delta, which compares the positioning of large accounts against smaller ones, has also dropped below zero. He reads the combination as big traders steadily reducing long bets and shifting toward the short side over time.
Ethereum ($ETH) is showing clear signs of weakening positioning among major market participants.
Both the 30-day and 180-day Open Interest Deltas are negative, alongside the Whale vs. Retail Delta.
This suggests that large players have significantly reduced their Long exposure… pic.twitter.com/iNtgmY7E4D
— Joao Wedson (@joao_wedson) October 10, 2026
What keeps the risk elevated is the leverage still in place. CoinGlass puts aggregate futures open interest at $31.64 billion as of early Monday, down from a late-September peak above $35 billion. Alphractal’s figure of 10.58 million ETH works out to roughly $27 billion at current prices, and the gap between the two numbers reflects differences in which exchanges each provider tracks, so the pair is best treated as a range.
Source: CoinGlass
When large accounts sit short and smaller traders hold leveraged longs, the market develops two pressure points at once. A drop through nearby support can trigger margin calls on retail longs whose forced selling drags price lower still, which is the scenario Wedson warns about, whereas a clean break above resistance would squeeze the opposite side and force short sellers to buy back ETH to close their positions.
Source: CoinGlass
Funding rates show how little appetite there is to pay for upside. The OI-weighted rate stood at 0.0019% per eight-hour interval early Monday, against the 0.01% default most exchanges apply in balanced conditions, so longs are still paying shorts but only about a fifth of the standard amount, which annualizes to roughly 2% and points to weak demand for leveraged bullish exposure. The rate also dipped briefly below zero during the October 7-8 sell-off, the first negative print in several weeks, before recovering with price.
Spot market flows tell a less one-sided story. A CryptoQuant contributor writing as Arab Chain noted that the platform’s liquidity shock z-score for ETH on Binance has dropped to its lowest reading in seven months. The indicator compares current exchange reserves with their average over the past year, and a reading near -1 means Binance is holding noticeably less ETH than usual, which suggests some coins are leaving the exchange for external wallets, and if that continues, the amount of ETH readily available to sell on the largest trading venue keeps shrinking, which can soften the impact of derivatives-driven sell-offs.
Source: CryptoQuant
Reserve data shows where coins sit without revealing why they moved, and withdrawals can feed staking, custody arrangements or other exchanges as easily as long-term holding, so the decline supports the more constructive reading of the market without settling the question.
Levels from the ETH/USDT 4-hour chart
A 4-hour close above $2,570 would undo the death cross and open the way toward the 0.5 retracement at $2,606.92, with the 0.618 level at $2,654.22 sitting close to the floor of the range ETH held for most of late September. Given how much whale positioning now leans short, that zone is also where short covering would begin adding fuel to any advance.
If sellers keep control of the $2,560 to $2,570 band, the 20 EMA near $2,532 becomes the first test and the $2,501 base built after the sell-off the second. Losing $2,501 would bring the $2,406.50 low back into reach, and with leveraged longs still sitting in the market, that is the area where a liquidation cascade of the kind Wedson describes would most likely unfold. Open interest is the variable to watch alongside price, because a rally paired with falling open interest would point to shorts closing, while a decline paired with rising open interest would mean fresh short positions are piling in.
The funding history also offers a benchmark from earlier this year. Between mid-February and May, the OI-weighted rate spent long stretches below zero while ETH chopped through a range under today’s price, before a further leg lower took it toward its yearly lows around late June. Today’s reading remains marginally positive, which shows traders are wary of paying for leveraged longs but have not yet slipped into the persistently negative funding conditions that accompanied that earlier slide.
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