Ethereum derivatives activity is flashing a fresh signal on Binance, where open interest measured in ETH terms has reached a new all-time high. The move comes as traders reassess Ethereum after a steep drawdown, even as macro and geopolitical uncertainty continue to suppress broader risk appetite.

CryptoQuant analyst Darkfost said the market has become “increasingly difficult to interpret,” with investors and institutions operating against a backdrop of elevated uncertainty tied to tensions between the United States and Iran. That uncertainty is not happening in isolation. According to the analyst, deteriorating economic prospects have made large-scale capital deployment a riskier decision, naturally limiting the willingness of market participants to add exposure.

Still, Ethereum futures are showing renewed signs of speculative demand.

Binance Ethereum Open Interest Hits New High

Darkfost said speculative activity has recently started to revive in derivatives, with Ethereum standing out. The analyst noted that ETH is currently trading roughly 67% below its previous all-time high and has moved into what he described as “an area of extreme oversold conditions” over the past few days.

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That weakness appears to have drawn in traders looking to rebuild exposure after months of pressure. “Some traders have not overlooked this opportunity and have chosen to increase their exposure despite the risks,” Darkfost wrote.

The result, according to the post, is a record level of Ethereum positioning on Binance. “As a result, Binance has just recorded a new all time high in Ethereum Open Interest (ETH value), with nearly 3.7 million ETH currently positioned in futures contracts on the platform,” the analyst said.

The figure is notable because it measures positioning in ETH terms rather than only in dollar value. After a large price decline, dollar-denominated open interest can look subdued even when the number of ETH contracts being carried by traders is rising. In this case, the increase suggests that speculative exposure to Ethereum is growing despite the weaker spot price environment.

Binance’s role in that activity has also expanded. Darkfost said the exchange’s share of total Ethereum open interest has risen above 44%, reinforcing its dominant position in the ETH derivatives market.

Traders Shift After Months Of Seller Dominance

The more important question is whether the record open interest reflects bottom-fishing, leveraged hedging, or a more durable change in market positioning. Darkfost’s post points to at least some improvement on the buy side.

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“Following Ethereum’s sharp devaluation, traders appear to be gradually returning to the buy side,” the analyst wrote. “On Binance, the weekly average Taker Buy/Sell Ratio has increased from 0.95 to 1.0, reflecting a rebalancing of flows after several months of seller dominance.”

That move from 0.95 to 1.0 does not indicate aggressive upside chasing by itself. Rather, it suggests that flows have moved closer to balance after an extended period in which sellers had the upper hand. In futures markets, that shift can matter because open interest rising alongside improving taker flow often shows that traders are no longer only using derivatives to press downside momentum.

The backdrop remains fragile, however. Higher open interest can amplify moves in either direction, especially when positioning builds during periods of macro stress. If the long side is indeed rebuilding, the market may become more sensitive to forced deleveraging if ETH fails to hold the levels attracting dip buyers.

Darkfost framed the setup cautiously, noting that Ethereum sentiment has “deteriorated significantly in recent months.” Even so, the analyst said more investors now appear willing to take the risk of rebuilding exposure, “particularly on the long side,” after a prolonged stretch of dominant selling pressure across futures markets.

At press time, ETH traded at $1,658.

Featured image created with DALL.E, chart from TradingView.com

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Ethereum has lost more than 12% of its value over the past ten days as selling pressure has overwhelmed the recovery that briefly carried the asset toward $2,400. The decline has been sustained and consistent — not a single sharp event but a series of lower highs and lower lows that have eroded the confidence built during weeks of cautious recovery. Against that backdrop, an Arab Chain analysis tracking Binance derivatives activity has identified a signal that introduces a layer of complexity into the straightforwardly bearish reading the price action currently suggests.

Ethereum’s open interest on Binance has climbed to approximately $5.5 billion — above the 30-day average of approximately $5.34 billion — as the price stabilizes near $2,110. The Z-Score measuring the deviation of current open interest from its recent historical norm has risen to approximately 0.62, reflecting a noticeable increase in speculative activity relative to the baseline that defined the past several weeks of derivatives market behavior.

The timing of that return creates the analytical tension the Arab Chain report examines. Speculative activity returning to Ethereum’s derivatives market while the price is losing ground is not the setup that straightforward bearish momentum describes. Momentum-driven declines typically see derivatives activity collapse alongside price — participants reducing exposure, leverage falling, open interest contracting.

The data is showing something different. And what it is showing at $2,110 may be the most important signal Ethereum’s derivatives market has produced since the selling pressure began.

Derivatives Are Waking Up While the Price Holds $2,000

The Arab Chain report traces the open interest recovery to its starting point to give the current reading its full context. ETH derivatives activity on Binance has been gradually rising since March — a sustained, directional trend that has developed alongside the price recovery from the February lows and the gradual return of liquidity to the market. The current reading above the 30-day average is not an abrupt spike but the continuation of a trend that has been building for months.

Binance: ETH Open Interest Z-Score | Source: CryptoQuant

The Z-Score at 0.62 sits in moderate territory — above the baseline that characterized the weakest activity periods of recent months but well below the elevated readings that historically signal excessive speculation or overcrowded positioning. That positioning on the spectrum matters. A market with moderate and improving derivatives activity is structurally different from one where open interest is spiking aggressively — the former describes rebuilding participation, the latter describes the kind of excess that precedes liquidation cascades.

The forward implication the report identifies is conditional in both directions. Rising open interest alongside price stability above $2,000 suggests new positions are being established — participants expressing directional conviction rather than simply maintaining existing exposure. When that dynamic develops alongside genuine spot market inflows, it tends to precede stronger and more sustained price movements as derivatives and spot demand reinforce each other.

The risk the analysis preserves is equally specific. Leverage rebuilding without corresponding spot market strength creates fragility rather than foundation — a derivatives structure that amplifies whatever move arrives next without the underlying demand to give that move durability. The Z-Score at 0.62 does not yet indicate that fragility. Whether it develops in that direction or resolves constructively depends on whether the spot demand that the derivatives activity is anticipating actually arrives.

Ethereum consolidates below the $2,150 level | Source: ETHUSDT Chart on TradingView 

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• Asia was mostly up. China’s CSI 300 was up 0.61%. Japan’s Nikkei 225 was up 0.6%. 
• But Europe flinched. Europe’s Stoxx 600 was down 1% in early trading. The U.K.’s FTSE 100 was down 0.6%. 
• Bitcoin was at $75K. 

Chart via TradingEconomics.

ONE BIG THING

Is Kalshi a bookmaker? The Supreme Court may decide — and the answer could reshape U.S. gambling

Prediction markets Kalshi and Polymarket are massive sports betting platforms: Sports wagers account for over 85% of all bets on Kalshi. But the platforms have long claimed that they are not bookmakers but “events contracts” providers, which are classified as swaps under federal law. Kalshi, for instance, has a Designated Contracts Market license, which allows it to offer derivatives under the oversight of the Commodity Futures Trading Commission. State regulators aren’t buying that, and some have sued the companies claiming they operate unlicensed betting operations. Two federal appeals courts are poised to offer clashing rulings—teeing the cases up for the U.S. Supreme Court to seal their fate, Fortune’s Jeff John Roberts reports.

IRAN

No deal: Iran pulls out of peace talks after U.S. seizes cargo ship in the Strait

The two-week ceasefire between the U.S. and Iran is due to end Wednesday, and this morning hopes for peace dwindled following a U.S. attack on an Iranian cargo ship in the Strait of Hormuz. The ship was trying to evade the blockade and was disabled, boarded, and taken into “custody” by U.S. forces. The Strait remains blocked both by U.S. Navy patrols and Iranian forces. The Iranian state news agency said Tehran would not send negotiators to peace talks as long as the U.S. continued to interfere in the Strait.

• How Trump sees it: “We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran. NO MORE MR. NICE GUY!” he posted on social media.

THE OPTIMIST

Don’t panic, yet: CBO chief thinks the U.S. can fix its $39 trillion debt — if Congress acts

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Talks between the two countries ended without a deal over the weekend, prompting President Donald Trump to announce that a naval blockade will be imposed on the Strait of Hormuz.

That would target Iranian oil shipments, which have continued flowing, while Tehran has bottled up supplies from other countries by selectively closing the strait with drone and missile attacks.

Futures tied to the Dow Jones industrial average fell 519 points, or 1.08%. S&P 500 futures were down 1.14%, and Nasdaq futures lost 1.27%.

U.S. oil futures jumped 8.24% to $104.53 a barrel, and Brent crude climbed 7.49% to $102.33. Gold fell 2.28% to $4,678 per ounce.

The U.S. dollar was up 0.43% against the euro and rose 0.33% against the yen. The yield on the 10-year Treasury was flat at 4.317%.

After the first month and a half of the war focused on aerial bombardments and missiles barrages, the next phase is poised to rely on naval forces as the U.S. follows a two-part strategy targeting Iran’s exports as well as its control of the strait.

U.S. Central Command said the Hormuz blockade will begin on Monday at 10 am ET, and indicated it will also be selective, despite Trump’s vow that the strait should be open to everyone or no one at all.

“The blockade will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman,” it explained in a statement. “CENTCOM forces will not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports.”

Preventing Iran from generating oil revenue would not only cripple its already-collapsing economy but also deny financial resources for the Islamic Revolutionary Guard Corps.

Meanwhile, the Navy sent two destroyers through the strait on Saturday to prepare for mine-clearing operations. Central Command said it is “establishing a new passage” for the maritime industry for the free flow of commerce.

The IRGC challenged the warships and warned them to leave. A drone was also reportedly launched at the ships, which destroyed it. On Sunday, the IRGC threatened to deliver a “strong and forceful response” to any warships that approach the Strait of Hormuz.

Until this weekend, U.S. ships had avoided the strait as Navy officials previously have described it as an Iranian “kill box” filled with numerous threats, including anti-ship missiles, drones, fast-attack boats, and mines.

The failure to reopen the strait has sent oil prices skyrocketing, and Tehran’s ability to scare away tanker traffic has emerged as its main source of leverage over the U.S.

But if the Navy can create an alternate path through the strait with manageable risks from Iranian attacks, then the regime loses its most potent weapon.

“One of the things that commercial ships were waiting to see was whether or not this strait was clear, and sailing two destroyers in is a big one,” Campbell University professor Salvatore Mercogliano, who specializes in military and maritime history, said on his podcast.

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Ethereum’s price being positioned above the $2,000 level now may be heavily attributed to the massive activity on the Futures market front. While the spot market has slowed down, the futures market is growing at an extremely high rate compared to spot, reshaping the market dynamics of ETH.

Futures Lead The Way In The Ethereum Market

As the week begins, Ethereum, the leading altcoin, is exhibiting a key development in its market dynamics. Even with broader market volatility, the derivatives activity of ETH is at the top of its game, snatching volumes at a notable rate.

Darkfost, an author at CryptoQuant and market expert, has outlined a strong divergence between BTC futures and the spot market. Looking at both markets, ETH futures volumes are running higher than those of spot markets. With traders primarily relying on leveraged positions rather than outright asset ownership, this imbalance suggests that the market is becoming more dominated by speculation.

The expert shared that the spot-to-futures volume ratio on Binance has recently dropped to the 0.13 level, marking the lowest annual level ever recorded for Ethereum. From a practical standpoint, this pattern implies that future volumes are 7 times larger than spot volumes. To put another way, almost $7 passes through futures contracts for every $1 traded on the spot market. 

This dynamic implies that Ethereum price changes are currently being driven by speculation. While this pattern remains difficult to interpret, it is generally not a good sign for markets. Excessive leverage can increase volatility through position changes or liquidation events and does not offer a solid structural foundation.

At the same time, current uncertainty, both geopolitical and economic, is powering a large share of investors to remain cautious. However, another key portion of this trend is that it does not appear to apply to the most speculative participants. 

The derivatives market on ETH remains highly active, with Open Interest gradually demonstrating signs of a rebound since reaching 5 million ETH. However, on-chain data shows that the open interest is now sitting at 6.4 million ETH, which is not far away from its previous all-time high of 7.8 million ETH, achieved in July 2025. 

Binance is at the forefront of this rising open interest, solely accounting for 2.3 million ETH, representing roughly 36% dominance in the ETH derivatives market. 

ETH Withdrawal From Crypto Exchanges Expands

Ethereum’s exchange outflows do not seem to slow down. According to Nexo, ETH on crypto exchanges has declined to its lowest level since 2016, and it’s not coming back quickly.

During this massive exchange withdrawal, staking queues were backed up for nearly 50 days, while the exit queue has almost finished. Next, it is noted that supply is locked in by design. At this point, the price is particularly vulnerable to any significant increase in demand when there is less ETH available on exchanges.

Featured image from Unsplash, chart from Tradingview.com

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Futures tied to the Dow Jones industrial average fell 158 points, or 0.34%. S&P 500 futures were down 0.23%, and Nasdaq futures lost 0.14%.

U.S. oil futures rose 0.38% to $111.96 a barrel, and Brent crude climbed 0.93% to $110.04. The national average gasoline price reached $4.11 a gallon on Sunday, according to AAA, up from $2.98 before the war.

In Europe, which depends heavily on Mideast refiners for jet fuel, shortages forced Italy to limit supplies at several airports. That’s after several countries in Asia have already started rationing energy.

The U.S. dollar was up 0.03% against the euro and flat against the yen. The yield on the 10-year Treasury rose 1 basis point to 4.356%.

The conflict has entered its sixth week, reaching the end of Trump’s earlier timeline for the war to last four to six weeks.

But Tehran shows no signs of relinquishing its grip over the Strait of Hormuz, even as it allows a growing trickle of tankers through, while Trump appeared to be emboldened by a daring rescue of a U.S. airman shot down over Iran.

In a social media post on Sunday, he threatened to destroy Iran’s power plants and bridges if the strait isn’t open by Tuesday, then demanded, “Open the F—in’ Strait, you crazy bastards, or you’ll be living in Hell – JUST WATCH! Praise be to Allah.”

That appeared to push his deadline back from Monday, which was already delayed from an earlier deadline a week and a half ago.

Trump also told ABC News that if Iran doesn’t make a deal, “their whole country is gone.” He then told Fox News, “If they don’t make a deal and fast, I’m considering blowing everything up and taking over the oil,”

And in an interview with the Wall Street Journal, he said that if Iran keeps the strait closed, “they’re going to lose every power plant and every other plant they have in the whole country.”

Mohammad-Bagher Ghalibaf, the speaker of the Iran parliament, responded in kind. “Your reckless moves are dragging the United States into a living HELL for every single family, and our whole region is going to burn because you insist on following Netanyahu’s commands,” he wrote on social media.

“Make no mistake: You won’t gain anything through war crimes. The only real solution is respecting the rights of the Iranian people and ending this dangerous game.”

Meanwhile, more than 2,000 Marines are in the Middle East, with thousands more troops on the way—as well as a third aircraft carrier.

Trump could deploy them to seize Kharg Island, from which 90% of Iran’s oil is exported, or other small islands near the Strait of Hormuz to weaken Iran’s grip on the narrow waterway that’s critical to the global oil trade.

For now, it’s unclear if the successful rescue of the F-15 airman after a harrowing operation makes a future ground assault more or less likely.

“On the one hand, the costs from this episode (four, as many as seven aircraft) may suggest the risks to such operations are simply too great to contemplate,” Gregory Brew, a Eurasia Group analyst focusing on oil and Iran, posted on X. “On the other hand, the admin may perceive the successful retrieval following operations inside Iranian territory as proof that such operations are feasible.”

Brent prices have appreciated by over 35% this year so far.

The Strait of Hormuz, a 21-mile-wide waterway, remains a critical passage for global supply. It accounts for 20% of the world’s oil and liquefied natural gas flows.

Commenting on the fundamental trends, Ajit Mishra, Senior Vice President – Research at Religare Broking, said that the near-term outlook is dominated by extreme volatility due to the ongoing US/Israel-Iran conflict, as oil markets are highly sensitive to potential supply disruptions in the Strait of Hormuz.

“Crude oil prices have started appreciating ever since the Iran conflict escalated with the US and Israel. The upside momentum has eased of late as the IEA began releasing 400 million barrels of emergency oil reserves to stabilise supply amid ongoing regional conflicts. Having said that, unless oil tanker movements gather pace from the Hormuz region, the overall outlook shall remain positive for the oil market,” Mishra said.

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Technical outlook

“Crude oil was seen trading in a narrow price band for months, and it was only during the first week of this month that it breached resistance barriers comfortably in line with the emergence of the US/Israel conflict with Iran. Crude oil had appreciated to 10,549 on MCX after closing above the strong resistance zone of 6,800-7,000,” the Religare analyst said.

MCX futures prices on the weekly chart remain above the key Exponential Moving Averages (EMA), signalling positive momentum ahead, Mishra said.

ETMarkets.com

Crude oil trading strategy

Consider initiating long positions in the 8,600-8,800 zone, with a stop loss below 8,150 and a target of 9,900.

Also Read: Gold plunges Rs 3,000/10 gram as investors turn cautious ahead of Fed policy. Should you sell on rise?

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)