Crypto

Ethereum Price Rally Fades as Derivatives Demand Cools Off

Guavy AI Editorial Team Published August 27, 2026

Instruments

ETH

The Ethereum price has seen a significant rally in recent times, but it appears that derivatives demand is cooling off after a short squeeze-led surge.

According to data from CryptoQuant and Coinglass, ETH's Net Taker Volume has flipped positive, indicating immediate market activity in perpetual futures leaning towards the upside.

However, new money flowing into ETH futures to defend the rally has been weak, with most of last week's spike coming from an intense short squeeze. This led to a large number of leveraged bearish bets being removed from the market, causing open interest to decline by roughly 500K ETH over the past week.

The Estimated Leverage Ratio (ELR) dropped to 0.74, its lowest level since early March, indicating deleveraging in the market.

Ethereum Price Rally Fades as Derivatives Demand Cools Off

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