Ethereum climbed back above $2,000 after a softer-than-expected US CPI print, and the move has traders and analysts debating whether the worst is behind the coin or if this is a temporary relief rally.

Reports say futures open interest has fallen sharply over the last 30 days, funding rates have swung into deeply negative territory, and some on-chain metrics point to a clustered support zone below current prices.

According to CryptoQuant, the headline figure showing an 80 million ETH decline in open interest across major venues grabbed attention. That number, if taken at face value, would be huge. It suggests large positions were closed rather than new ones being put on.

But the scale of the change also invites scrutiny; reporting errors or dollar-value comparisons mislabeled as ETH can happen. Still, a sizable pullback in futures exposure on exchanges including Binance, Gate, Bybit and OKX has been logged, and that much appears real.

Funding rates on some platforms are pushing to levels not seen in roughly three years. When traders pay to hold short positions, it signals strong bearish conviction.

It is reported that such extremes tend to be followed by a sharp reversal as the crowd can become one-sided, and that leads to a quick reversal as the market sentiment changes.

This was seen at the end of 2022, where there was extreme shorting followed by a quick reversal. This does not mean that it will happen this time around as markets can remain one-sided for longer than expected.

Glassnode’s on-chain data reveals a significant cost-basis area between $1,880 and $1,900, where about 1.3 million ETH was traded.

The $2,000 mark is acting as a psychological anchor and is reinforced by moving average clusters. A breakout from the recent falling wedge pattern points to an initial measured target near $2,150, a ceiling that would be tested before higher resistance near $2,260 and then $2,500.

Those levels are not certainties; broader market tone and Bitcoin’s direction will influence whether they are reached.

Reduced open interest lowers the risk of cascade liquidations for now, which can tame intraday volatility. At the same time, low funding rates show that bearish bets are still active and could be squeezed if momentum turns.

Reports say accumulation wallets increased inflows when prices dipped, hinting at longer-term conviction among some investors.

Featured image from Unsplash, chart from TradingView

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