ETH open interest on Binance extends its decline

ETH open interest is struggling to recover since October 10. The recent deleveraging is part of a longer process, with significant outflows of open interest on Binance. 

ETH open interest on Binance slid by 51% in the past three months, following the crash of October 11. Since then, open interest has made attempts to recover on other exchanges. On Binance, ETH open interest continued to decline, evaporating nearly $6.4B in positions in the past three months. 

The recent shift in open interest signals at a market reset and a re-evaluation of Ethereum’s potential. The past year turned into the most speculative period for ETH, raising open interest on Binance to a peak at $12.6B in August. 

Ethereum entered its most speculative period in history

Ether got a boost from robust ETF interest, the growth of the L2 economy, and the continued recovery of DeFi, staking, lending, and stablecoin transfers. However, ETH failed to break out to a higher market range, and only triggered a short altcoin season. 

After an aggressively bullish period, ETH built a less sustainable market structure, which started unwinding with signs of a bear market. ETH briefly switched to spot trading as a compensation for weakening open interest, but the trading failed to sustain the market price.  

For years, ETH traded as a utility token, while most of its projects were small-scale or experimental. The confidence that Ethereum could become a global settlement platform for finance set expectations that the ETH token may be more valuable. 

Speculative open interest rode on the back of the bullish conviction, but quickly unraveled when ETH failed to rally. Other exchanges also lost their liquidity, with Gate dropping to $3.5B, and Bybit down to $2.3B from $6.1B. On Hyperliquid, ETH open interest declined to $1.3B. In total, ETH positions declined to $15B, with a balanced ratio of long and short positions. 

The slowdown of trading activity coincided with a 43% slide for ETH, from a peak of $4,830 to $2,800. ETH still trades at 0.032 BTC, as the leading coin abandoned its higher range.

ETH records another month in the red

Ethereum ended November with a total decline of 22.2%. In 2025 to date, despite the active speculative trading, ETH only had three months in the green. The token went through short-term rallies that proved unsustainable. 

November’s performance was the second-weakest since February, when ETH contracted by 32.2%. 

Despite the price fluctuations, DeFi space remains relatively healthy, as most loans have a lower liquidation price. However, the serial liquidations on centralized markets acted to discourage traders in building up long positions. 

At the current price levels, ETH has a lower probability of a short squeeze. Short positions are also declining, and only reach up to $2,900. The subdued derivative trading also lowered the ETH fear and greed index, which slid down to 27 points, indicating fear. 

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