Ethereum’s recent rally is showing signs of losing steam, as new data points to rising exchange inflows and a slowdown in derivatives trading activity.
On July 1, CryptoQuant analyst Amr Taha highlighted that nearly 100,000 ETH worth about $250 million was deposited into Binance in two large waves. Such hefty deposits often increase exchange reserves, which can translate into selling pressure if market sentiment turns bearish.
Taha also noted an emerging gap between Ethereum’s spot price and its open interest on Binance. Since June 26, ETH has seen consistent spot market buying, posting three consecutive local highs above $2,500. Yet, open interest on Binance futures has lagged, forming lower highs below $5.6 billion. This pattern suggests fewer traders are opening new positions, possibly signaling caution or uncertainty about the strength of the recent price surge.
Liquidity Concerns and Technical Hurdles
Adding to the cautious mood is the ongoing reduction in net liquidity from the U.S. Federal Reserve. Over the past few weeks, liquidity has dropped from around $6.2 trillion to $5.84 trillion. Lower liquidity generally means less capital available for risk-taking, which can dampen both traditional markets and crypto trading.
Unless Ethereum sees a surge of strong buying interest to absorb this challenging environment, its upward potential could remain limited in the near term.
At the time of writing, Ethereum is trading at $2,451, down 0.5% over the past 24 hours. The price is approaching $2,455, a key resistance level that has held firm over the past week and also lines up with the 20-day simple moving average.
Technical indicators are flashing mixed signals. The Bollinger Bands are tightening, indicating a period of low volatility and market indecision. The relative strength index (RSI) currently sits at 48.9, suggesting neither overbought nor oversold conditions and pointing to a consolidating market.
Meanwhile, oscillators like the Stochastic RSI are edging into overbought territory, which could limit short-term upside potential. On the other hand, the MACD and momentum indicators are showing mild bullish signals, hinting that some upward pressure still lingers.
However, longer-term moving averages remain above the current price, signaling broader weakness. Short-term averages, such as the 10-day and 50-day exponential moving averages, are not offering much support at these levels.
Key Levels to Watch
If buying pressure returns and Ethereum can convincingly break above the $2,500 level on higher volume and increasing open interest, the next target could be the upper Bollinger Band near $2,622.
On the flip side, if support fails and exchange inflows continue to exceed demand, ETH could slip back toward the lower Bollinger Band around $2,287, raising the risk of a deeper pullback.
For now, Ethereum appears to be in a wait-and-see phase, with traders keeping a close eye on whether recent gains can hold or whether caution will take over the market once again.
