Analysts from CryptoQuant and Arkham have observed unusual metrics in derivatives of the second-largest cryptocurrency by market capitalization.
An expert known as Arab Chain noted a decline in open interest for Ethereum on the Binance exchange. The figure dropped to $4.99 billion, compared to an average of $5.31 billion.
The negative MVRV Z-Score (-0.91) confirms a liquidity outflow. According to the analyst, traders are hesitant to open new positions as the market lacks confidence in a swift rise.
A specialist under the pseudonym Darkfost highlighted signs of a potential short squeeze. Since the local low on February 6, Ethereum’s price has increased by more than 30%. At the peak of the decline, the asset lost about 65% of its value, and the altcoin market capitalization was halved.
A Dangerous Game
Despite the recovery, investors continue to open short positions. Funding rates on Binance have remained negative for a record duration: the last occurrence was in November 2022, following the collapse of FTX.
The average funding rate for the month was -0.0018, indicating that market participants do not believe in continued growth and expect a downward movement.
Darkfost described this strategy as risky. He noted that the volume of short position liquidations is already increasing. Forced closure of shorts could trigger a “cascade” effect, pushing Ethereum’s price even higher. The expert emphasized that the market rarely rewards the consensus of the majority.
Meanwhile, major players continue to accumulate coins. Arkham reported that Fundstrat founder Tom Lee has staked 217,350 ETH, valued at approximately $508.4 million, in staking protocols.
Tom Lee just staked $508.4M ETH
Bitmine has now staked over 4 MILLION ETH (worth $9.3B) — that’s 10.5% of the total staked ETH supply.
Tom Lee is buying and staking ETH. pic.twitter.com/NofM7r0YRG
— Arkham (@arkham) May 1, 2026
The BitMine platform has increased its own locked assets to 4 million ETH, which is $9.3 billion at the current rate.
The company controls 10.5% of the total Ethereum supply in staking.
Back on April 10, the daily number of transactions on the leading altcoin’s blockchain approached 1.3 million.