Ethereum’s $8.4B open interest is a bad sign?

You ever notice how some things, like that stubborn espresso stain on your office shirt, just don’t budge?

Well, Ethereum’s open interest in the derivatives market is doing the same dance at $8.4 billion.

A figure that refused to take a break, even as ETH’s price started playing hardball.

Price drops, but OI holds its ground

While Ethereum’s price took a little detour southward by a few percents, the derivatives market didn’t get the memo about folding.

Usually, when prices take a dip, open interest follows suit, signaling traders sweating bullets and cutting losses.

But not today. The $8.4 billion ceiling held firm on Binance’s books, showing the big players ain’t scared yet, they’re either bracing for a comeback or just simply not buying the dip story.

Another juicy tidbit is that the speed of OI shrinkage is slowing down. The daily change maxed out at around -3.4%, which makes that previous drop look like child’s play.

So, that wild sell-off energy? Seems like it’s running out of gas.

Tightening the supply

Binance’s net taker volume remains negative, hovering about -1.08 billion to -1.11 billion. Sellers are definitely hustling, no doubt.

But guess who’s stepping up? The buyers, soaking up that selling pressure like a boss at a happy hour bar. They’re absorbing the blows yet holding their ground.

Add to that, ETH withdrawals from major exchanges like Binance and Kraken keep exceeding 120,000 ETH daily, picture this like your office co-worker steadily emptying the communal snack drawer.

These withdrawals tighten supply, making it tougher for sellers to flood the market and push prices lower.

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Bear trap?

Fellow crypto expert Johnny Woo is waving a red flag over a head-and-shoulders pattern forming on Ethereum’s charts.

That’s a traditionally a bearish sign. But the point is, he’s calling it one of the biggest bear traps ever.

There are chances that September’s weakness might just be a slick market setup to shake out the nervous Nellies before ETH rockets in October, what traders are lovingly dubbing Uptober.

So, are we looking at a crash or a cunning comeback? Experts lean towards the latter, betting this shakeout is a setup for something bigger, a bear trap with a knockout punch in the making.

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