The Ethereum (ETH) market has recently become intriguing again.
On the one hand, the ETH price is showing signs of confidence by printing a higher low, which is usually considered a sign that the upward trend is still quite strong. But strangely, data from Binance actually shows the opposite. According to on-chain analyst Amr Taha, ETH’s open interest on the exchange is actually forming a lower low. This is a classic example of divergence between the spot price and the derivatives market—two paths that usually reinforce each other are now moving apart.
This kind of divergence often indicates that derivative traders’ expectations are not aligned with price action. This could be because many are reducing leveraged positions, or perhaps some traders are simply choosing to avoid excessive risk. On the other hand, the funding rate has become calmer, tending towards neutral. Such conditions typically make the derivatives market less noisy, which can actually provide the foundation for a more stable price rally.
Source: CryptoQuant
ETH Keeps Flowing Out: Are Holders Locking In for the Long Game?
Furthermore, signals from the spot market also indicate that ETH is moving out of exchange circulation. CoinGlass heatmap data reveals that in the past 24 hours, major exchanges like Coinbase, OKX, and Bybit experienced significant outflows. Coinbase led the way with $55.63 million in withdrawals, followed by OKX with $38.72 million, and Bybit with $30.67 million. Meanwhile, Gemini recorded a smaller figure, around $3.22 million, but still in line with the general trend of decreasing liquidity.
Source: CoinGlass
In terms of inflows, only Binance, Upbit, and Kraken recorded increases, although on a much smaller scale. Binance recorded around $7.47 million, followed by Upbit with $7.35 million and Kraken with $3.24 million. Overall, withdrawal pressure far outweighed inflows. If this trend continues, the tradable supply of ETH will shrink further. Meanwhile, as of press time, ETH is changing hands at about $3,789.75, up 1.37% over the last 24 hours and 54.75% over the last 30 days.
Supply Keeps Drying Up, But Demand Just Won’t Back Down
The day before the wave of withdrawals occurred, Tether minted $2 billion in USDT in a single large transaction on the Ethereum network. This kind of fresh funds is often referred to as “dry powder”—capital that can be immediately released into the market at any time. Many suspect there are significant preparations underway behind the scenes, either for institutional purchases or market-making strategies.
Source: CryptoQuant
Then, just one day later, more than 244,000 ETH worth over $900 million was withdrawn from Coinbase. This was one of the largest outflows recorded in recent months. Such an event is often considered a bullish signal, especially if the withdrawn ETH was intended for long-term holding. This means the available supply of ETH on exchanges continues to dwindle.
Source: CryptoQuant
Interestingly, the CNF recently cited a memo from the CIO of Bitwise stating that despite the continued rise in demand for ETH, many large investors still hold a much smaller portion of ETH than Bitcoin. Yet, ETH has surged more than 65% in the past month, even reaching 160% since April. This increase is believed to be due to an imbalance between shrinking supply and growing demand.
And speaking of demand, the flow of funds into spot Ethereum ETFs—in the past week alone, $1.85 billion has flowed into ETH ETFs in the United States. This is a kind of additional fuel for the market, reinforcing the possibility that Ethereum hasn’t run out of steam. So, even though there’s a divergence between price and open interest, that’s precisely where new potential can emerge. Small traders may be starting to step aside, but large wallets are becoming more aggressive.