Ethereum Correction Nears End: Binance Data Signals Recovery

Ethereum’s correction from its late August high of approximately $4,950 appears to be approaching its conclusion, with Binance’s futures market data suggesting the dip may be running out of steam. According to analysis by crypto researcher Burak Kesmeci, historical patterns indicate that local bottoms for Ethereum have frequently been preceded by significant drops in Binance’s open interest. Over the past three months, an average OI drop of 14.9% on the hourly timeframe has corresponded with spot price corrections averaging 10.7%, creating a reliable leading indicator for market weakness.

Kesmeci provided three precise examples demonstrating this correlation: a 10.52% OI fall from 11.4 billion to 10.2 billion on August 17, a dramatic 25.38% crash from 13 billion to 9.7 billion on August 20, and an 8.69% decrease from 11.39 billion to 10.4 billion on September 13. In each instance, the reduction in open interest served as an early warning signal for upcoming spot market weakness. The analyst suggests that the current OI may need to ease down to approximately 9.69 billion to signal a full market reset, viewing this cooling of leveraged positions not as a bearish omen but as a necessary market cleanse.

While derivatives traders have been reducing their exposure, on-chain data reveals a contrasting trend of strengthening fundamentals. CryptoQuant reported that Ethereum staking deposits have surged to a record 36.2 million ETH, while exchange balances have dwindled to multi-year lows. This indicates that long-term holders are locking up tokens rather than selling into weakness, demonstrating strong conviction among core Ethereum investors.

Institutional adoption continues to accelerate, with U.S. spot ETFs now holding 6.7 million ETH—nearly double their April holdings. This substantial accumulation reflects growing corporate demand and suggests that sophisticated investors are using the current correction as an accumulation opportunity. The divergence between derivatives market caution and fundamental strength creates a compelling narrative for Ethereum’s medium-term prospects.

At current levels, ETH trades at $4,487, representing a modest 0.8% decline over 24 hours but maintaining a 3.9% weekly gain. The asset sits comfortably above its September low of $4,307 and remains only 9.3% below its all-time high reached on August 24. Despite the correction, Ethereum has gained nearly 4% over the past month and maintains an impressive 96% yearly growth, underscoring its resilience in the broader crypto market.

Kesmeci’s technical analysis exists alongside divergent fundamental perspectives from traditional financial institutions. Banking giant Citigroup has set a year-end 2025 price objective of $4,300 for Ethereum, a figure that appears conservative compared to September’s record high near $4,955. According to CryptoQuant analysts, the bank’s cautious stance accounts for macroeconomic risks and potential regulatory challenges that could impact cryptocurrency markets.

The convergence of technical indicators suggesting a nearing bottom, strong on-chain fundamentals, and growing institutional adoption creates a compelling case for Ethereum’s recovery. As Kesmeci concluded, “The futures side is almost ‘cooled off,’ and we may be looking at an ETH preparing for the next leg of the rally.” This sentiment, combined with robust underlying metrics, suggests that the current correction may be establishing the foundation for Ethereum’s next significant upward move.