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Ethereum’s recent market behavior signals a significant shift as leverage unwinds and spot demand strengthens, potentially setting the stage for a major price movement.
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Despite sharper dips than Bitcoin this June, Ethereum has demonstrated strong recoveries, reinforcing its structural support and investor confidence.
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COINOTAG highlights that the current futures deleveraging may be a healthy reset, paving the way for bulls to build momentum and challenge key resistance levels.
Ethereum’s June corrections and swift recoveries highlight growing spot demand and leverage rotation, signaling a potential parabolic breakout in Q3.
Spot Demand Surges as Derivatives Market Cools Down
Ethereum began June with a notable 10.77% correction, dropping to approximately $2,393 amid a broader market pullback that saw Bitcoin fall 4.44% from its $105k resistance level. This initial dip was followed by a robust rebound, with ETH climbing 20.3% from its lows—significantly outperforming Bitcoin’s 10.03% recovery during the same period. Such relative strength underscores Ethereum’s solid structural support and growing spot market demand.
More recently, renewed geopolitical tensions triggered another market-wide selloff, pushing Bitcoin down 7% to $102,832 and Ethereum even further, with a 14.9% decline to $2,441. This sharper ETH pullback was largely driven by futures market deleveraging, as traders reduced leveraged positions. However, Ethereum’s rapid bounce back—recovering over half of the losses to trade near $2,619—demonstrates that underlying spot demand remains resilient and that the leverage flush has not weakened investor conviction.
Source: TradingView (ETH/USDT)
Ethereum’s Futures Market Signals a Rebound in Leverage and Bullish Sentiment
Ethereum’s resilience is further evidenced by its derivatives market dynamics. Following the recent liquidation event, Open Interest on ETH futures has bounced back by 5% to reach $36 billion, indicating renewed trader engagement. Additionally, funding rates remain positive, which typically reflects a dominant long-side bias among market participants.
The Estimated Leverage Ratio (ELR), a key metric measuring the average leverage used by traders, has also started climbing again after a sharp 9% drop to 0.78 last week. This suggests that leverage is rotating back into the market, with traders repositioning for potential upward momentum. Such a recovery in leverage, combined with strong spot demand, creates a robust foundation for Ethereum’s price action moving forward.
Source: Glassnode
Implications for Ethereum’s Price Trajectory in Q3
Supported by firm spot demand and a recovering futures market, Ethereum is currently outperforming Bitcoin with a 3.55% gain at press time. This mirrors patterns observed in previous cycles where post-liquidation phases led to stronger structural support and set the stage for parabolic price rallies.
Such historical trends suggest that Ethereum’s current consolidation and leverage rotation could mark the transition from a high-risk environment to a high-reward opportunity. If this momentum sustains, the $3,000 price level may serve as a launchpad rather than a ceiling as the market advances into the third quarter.
Conclusion
Ethereum’s performance in June reveals a market undergoing a strategic reset, characterized by leveraged position adjustments and robust spot buying interest. These dynamics reinforce ETH’s structural support and hint at a potential parabolic breakout in the near term. Investors and traders should closely monitor leverage metrics and spot demand trends, as these will be critical indicators of Ethereum’s next significant move.
