The Ethereum price is navigating a crossroads as bearish sentiment grips the futures market, yet spot investors continue to show confidence ahead of the highly anticipated Pectra upgrade. At the time of writing, Ethereum (ETH) is trading around $1,770, down 2% over the past 24 hours. While derivatives data points to growing short positions, on-chain activity reveals a different story — one of accumulation and long-term optimism.
This divergence between futures traders and spot market participants highlights a classic tug-of-war in crypto markets: short-term speculation versus long-term fundamentals.
Bearish Pressure Builds in Ethereum Futures Market
Despite a relatively modest 2% drop in price, Ethereum’s open interest (OI) — the total value of outstanding derivative contracts — has increased by nearly 4% in the last day, according to Coinglass. This rise in OI during a price decline strongly suggests that new capital is flowing into short positions, signaling growing bearish sentiment among leveraged traders.
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Further confirming this trend is the Taker Buy/Sell Ratio, which has plunged to 0.866, the lowest level since February 2. A ratio below 1 indicates that more traders are taking sell orders (taker sells), reflecting dominant selling pressure in perpetual futures markets.
Interestingly, while most major exchanges saw an increase in ETH open interest, the CME Group — a key barometer for institutional activity — reported a 5% decline in open interest. This suggests that institutional traders may be reducing exposure or closing positions ahead of Pectra.
However, a closer look reveals a nuanced picture: hedge fund short positions on CME have been rising since mid-April. This resurgence may be linked to sustained inflows into U.S. spot Ethereum ETFs, reigniting interest in ETH basis trades — where institutions short futures while holding spot ETH to capture the premium.
Spot Investors Defy Downturn: 63,690 ETH Exit Exchanges
In stark contrast to futures traders, spot market participants are acting bullish. Over the past 24 hours, 63,690 ETH flowed out of centralized exchanges, according to CryptoQuant. Net exchange outflows are widely interpreted as a sign of long-term holding behavior, as investors move assets to private wallets rather than selling.
This accumulation trend underscores strong confidence in Ethereum’s fundamentals — particularly the upcoming Pectra upgrade, expected within the next 24 hours.
What’s New in the Pectra Upgrade?
The Pectra upgrade introduces several critical enhancements aimed at improving scalability, usability, and staking flexibility:
- Doubled Blobspace: Increases from 3 to 6 blobs per block, boosting data availability for Layer 2 rollups.
- Higher Staking Limits: Raises the maximum staking cap from 32 ETH to 2,048 ETH per validator, enabling larger institutional participation.
Smart Account (ERC-4337) Upgrades:
- Sponsored transactions: Allow third parties to pay gas fees for users.
- Gas payment in ERC-20 tokens: Users can pay transaction fees with stablecoins or other tokens.
- Batched transactions and wallet recovery: Improve user experience and security for self-custody wallets.
These upgrades are not just technical improvements — they represent a major step toward making Ethereum more accessible and scalable for mainstream adoption.
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Ethereum Price Forecast: Critical Support at $1,688
Technical indicators suggest Ethereum is at a pivotal moment. The asset has broken below several key support levels:
- The $1,800 psychological level
- The 14-day Exponential Moving Average (EMA)
- The 50-day Simple Moving Average (SMA)
- The lower boundary of a symmetrical triangle pattern
A breakdown from a symmetrical triangle on the daily chart typically signals bearish continuation — especially when accompanied by rising open interest. If ETH fails to reclaim these levels with a strong bullish close, the next major support lies at $1,688.
Over $50 million in futures positions were liquidated in the past 24 hours, with longs accounting for **$39.78 million and shorts for $11.15 million**. The dominance of long liquidations confirms that bulls were caught off guard by the sudden downward move.
Key Technical Indicators Signal Caution
- Relative Strength Index (RSI): Approaching neutral territory (around 50), suggesting neither overbought nor oversold conditions — but momentum is shifting bearish.
- Stochastic Oscillator: Rapidly declining from overbought levels and now below neutral, reinforcing downward pressure.
A daily candle close above the broken symmetrical triangle would invalidate the current bearish outlook and could spark a relief rally toward $1,850 or higher.
Frequently Asked Questions (FAQ)
What is the Pectra upgrade for Ethereum?
Pectra is a network upgrade designed to enhance Ethereum’s scalability and user experience. It increases blobspace for Layer 2 scaling, raises staking limits, and improves smart wallet functionality through features like sponsored transactions and gas payments in ERC-20 tokens.
Why are futures traders bearish while spot investors are bullish?
Futures traders often focus on short-term price movements and leverage opportunities, especially around major events like upgrades. Spot investors, however, prioritize long-term value and network improvements, leading them to accumulate during dips — especially before anticipated catalysts like Pectra.
What happens if Ethereum drops to $1,688?
$1,688 is a strong historical support level. A drop to this zone could trigger buying pressure from value-focused investors. However, failure to hold this level might open the door to further downside toward $1,600.
How do exchange outflows affect Ethereum’s price?
When ETH flows out of exchanges, it reduces immediate selling pressure. Large net outflows often precede price rallies, as supply available for sale decreases while demand remains steady or increases.
Can Ethereum recover if it breaks below key moving averages?
Yes — technical indicators are not destiny. A strong catalyst, such as successful Pectra implementation or continued ETF inflows, could drive a reversal even after breaking key levels. Market structure and macro conditions will ultimately determine recovery potential.
What role do ETFs play in Ethereum’s price action?
Spot Ethereum ETFs in the U.S. have introduced institutional-grade demand. Sustained inflows increase buying pressure and signal growing confidence in ETH as a regulated investment vehicle, potentially offsetting short-term bearish trends.
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Final Outlook: Short-Term Pain, Long-Term Gain?
Ethereum is experiencing classic pre-upgrade volatility. While leveraged traders bet on a "sell the news" scenario, spot investors are voting with their wallets — accumulating ETH ahead of Pectra’s launch.
The upgrade’s technical merits — improved scalability, better user experience, and enhanced staking flexibility — position Ethereum for stronger adoption in both DeFi and enterprise use cases.
Short-term price action will depend on whether bulls can defend $1,688 and reclaim key moving averages. But for long-term holders, today’s dip may be tomorrow’s entry point.
As always in crypto, volatility is the price of innovation — and Ethereum continues to lead the way.