Ethereum accumulation has seen a significant uptick, with long-term holders amassing over 1.6 million ETH. This comes as an Open Interest reset resulted in the elimination of more than $5 billion in leverage. The current combination has fostered a cleaner market environment, potentially paving the way for a more stable ETH recovery, provided that macro conditions and on-chain flows continue to be favorable.
Recent data indicates that long-term holders and accumulator addresses have collectively added approximately 1.6 million ETH throughout September. On September 18, accumulator addresses saw a remarkable inflow of around 1.2 million ETH. On September 25, an additional 400,000 ETH was recorded, underscoring the trend of substantial purchases by wallets that have a history of holding onto their assets instead of liquidating them. These flows indicate that both institutional and retail participants are gearing up for long-term exposure to Ethereum, rather than engaging in short-term trading, showcasing an increasing confidence among long-term holders. From September 23 to 24, major derivatives platforms experienced a notable decline in Open Interest, resulting in the elimination of more than $5 billion in leveraged positions. On September 23, Binance experienced a staggering loss exceeding $3 billion, followed by an additional $1 billion loss the next day. Bybit and OKX experienced drops of approximately $1.2 billion and $580 million, respectively.
The recent OI reset holds considerable importance as it eliminates surplus leveraged positions, thereby reducing the likelihood of forced liquidations that could escalate volatility. The current market showcases a more refined price structure, potentially enabling ETH price movements to be influenced more by on-chain flows and spot demand instead of speculative leverage. As leverage has been removed from the market, the risk of a downside cascade has diminished. Technical indicators are signaling oversold conditions, with an RSI hovering around 33 and a flattening MACD. This suggests that a measured rebound could be on the horizon if buying pressure continues to build. Following a dip beneath the $4,000 mark, Ethereum has recently demonstrated signs of a rebound, trading around $3,925 at the time of this report. Market participants are currently monitoring a number of crucial indicators: On-chain inflows and outflows indicate that the ongoing net accumulation by long-term holders may bolster a bullish foundation.
Derivatives positioning indicates that a reduction in Open Interest diminishes liquidation risk and curtails abrupt price fluctuations. Technical indicators reveal that an RSI below 35 indicates oversold conditions, while a sustained positive MACD may confirm momentum for a recovery. Overall, Ethereum finds itself at a critical crossroads. The interplay between long-term holder accumulation and derivatives deleveraging has resulted in a more streamlined market, potentially paving the way for more stable price growth, provided that favorable conditions continue to prevail.