- Ethereum fell 15% as exchanges were flooded with forced liquidation after forced liquidation. Despite the intensified accumulation, the price action was mainly driven by derivative-based flows.
- The open interest reset reflects prior cycles in 2021, 2023 and 2025, each clearing speculative leverage before an eventual return to stability.
- In one week, investors accumulated 570,000 ETH, and yet prices were lower, indicating the unwinding of leverage outweighed buy flow during short-term corrective structural actions.
Ethereum has experienced one of the largest derivatives market resets since 2024, with open interest collapsing and long liquidations surging. Despite strong investor accumulation of ETH, the price fell sharply, dropping nearly 15% within a week.
Long Liquidations Trigger Price Pressure
According to CryptoQuant data, Ethereum’s open interest declined suddenly across exchanges as hundreds of millions in long positions were liquidated. These liquidations occurred in rapid succession, creating heavy sell pressure in the market.
Forced selling often accelerates once liquidations begin. Market makers and derivatives-driven flows contribute to downward momentum, amplifying the decline. This structural weakness becomes visible when speculative positioning reaches extreme levels.
Charts tracking liquidation activity show clear alignment between liquidation spikes and sharp price drops. The Ethereum market, therefore, reacted less to spot demand and more to leverage unwinding during this period.
Open Interest Reset Mirrors Previous Cycles
Historical data suggests Ethereum has experienced similar resets during 2021, 2023, and 2025. Each reset cleared excess leverage, allowing the market to stabilize. These cycles reflect how derivatives often dominate short-term market movements.
Open interest plays a crucial role in determining price direction during periods of high speculation. When levels become unsustainably elevated, liquidation cascades are almost inevitable. As the system resets, leverage is removed, creating more balance.
Market observers point to these past examples as a structural pattern. What appears as weakness often signals the end of speculative excess, preparing the ground for renewed growth.
Buying Amid Decline Creates Paradox
During the latest decline, investors accumulated nearly 570,000 ETH in a single week. Yet prices fell as leveraged longs unwound. This paradox demonstrates that buying activity cannot always offset derivatives-driven selling pressure in the short term.
Price formation in Ethereum is shaped by leverage alongside demand. Forced liquidations frequently outweigh accumulation during periods of speculative imbalance, pushing prices downward temporarily.
However, CryptoQuant’s charts show that resets often create the conditions for recovery. By cleansing excessive leverage, the market builds a stronger foundation for Ethereum’s long-term performance.
