Ethereum must hold $2,400 to avoid a potential drop toward $2,100.
Open interest surge signals risk of market instability if not corrected.
Ethereum (ETH) is holding near $2,554.55 after gaining nearly 30% over the past week. Despite the upward momentum, market analysts caution that ETH is approaching a vital support level.
According to crypto analyst Daan Crypto Trades, Ethereum is testing a critical support level of around $2,400. He notes that this level will likely face pressure before further upside occurs. The analyst recommends caution on new long positions, pointing to high open interest across the market.
If the $2,400 level holds, Daan expects Ethereum to form a range between $2,400 and $2,700. However, if ETH fails to maintain this zone, the next significant support is $2,100. He warns that a slow drop could be more damaging than a sharp decline followed by a rebound.
Despite recent dips, Ethereum remains about 20% higher than the previous week, reflecting continued bullish sentiment in the mid-term.
Ethereum Moves Above 200 SMA on 3-Day Chart.
Ethereum recently closed above the 200-period simple moving average (SMA) on the 3-day chart. According to analyst Ali Martinez, this level, near $2,700, is historically linked with bullish momentum for ETH. Martinez notes that ETH’s move above the 200 SMA may indicate a broader market shift toward positive sentiment.
On the 3-day chart, #Ethereum $ETH closing above the 200-period SMA has historically triggered major bull rallies. And that level now sits at $2,700! pic.twitter.com/zTryO1xZCh
— Ali (@ali_charts) May 15, 2025
When the price closes above the 200 SMA, it often signals potential for trend reversals. Martinez highlights that Ethereum’s rise above this threshold follows a phase of retracement and consolidation.
Holding above the SMA could attract additional buyers and support a continuation of the current rally, provided broader market conditions remain favorable.
Open Interest Surges Above $5B as Traders Chase Momentum
According to Daan Crypto Trades, open interest on Ethereum has surged past $5 billion in one week. While some of the increase stems from ETH’s recent price rise, the majority is driven by aggressive position chasing.
He explains that spot ETF net flows have stayed flat despite the high open interest. This suggests that the gains may result from short squeezes across altcoins rather than organic investor demand.
Daan stresses that the current high open interest could be a warning sign. A $2 billion-plus reduction is needed to restore balance, he adds. A rapid drop would be more favorable than a slow decline, which tends to lead to prolonged market instability. He maintains his long-term ETH positions but has taken profits on recent highs.
Previously, Coincryptonewz reported that Ethereum’s growth is supported by rising stablecoin activity, increased tokenization, and expanding Layer 2 usage among institutions.
The Pectra upgrade, led by Vitalik Buterin, introduced EIP-4850 and EIP-7691. EIP-4850 allows revenue sharing between the Ethereum mainnet and Layer 2 chains, while EIP-7691 reduces transaction costs on Layer 2 networks. These upgrades and roadmap goals focused on Layer 1 clarity and security continue strengthening Ethereum’s long-term position.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.
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