Ethereum (ETH) continues to capture investor attention after struggling to reach the $5,000 mark in August 2025. Recent data from Binance suggests that ETH may be nearing a local bottom, potentially setting the stage for its next move higher. Analysts point to futures market dynamics, institutional demand, and declining exchange reserves as signs of a strong foundation for Ethereum’s long-term growth.
Binance Open Interest Declines
According to a recent CryptoQuant Quicktake analysis, Ethereum’s futures open interest (OI) on Binance has shown a pattern of sharp declines ahead of local bottoms. The analyst, identified as burakkesmeci, highlighted that these drops often precede spot price corrections, signaling where ETH may stabilize before attempting another rally.
Over the past three months, local bottoms were typically formed after an average 14.9% decline in Binance ETH OI. In comparison, spot prices registered an average correction of 10.7% during these periods.
For example, on August 17, Binance ETH OI fell from $11.4 billion to $10.2 billion, a 10.52% drop. Just three days later, on August 20, the metric tumbled further from $13 billion to $9.7 billion, representing a steep 25.38% correction.
The latest notable decline occurred on September 13, when ETH OI dropped from $11.39 billion to $10.4 billion. Analysts suggest that the metric could still fall to around $9.69 billion, indicating Ethereum might already be within the local bottom zone, though some downside risk remains.
Futures Data as a Leading Indicator
The analyst explained that futures open interest often acts as a leading indicator for Ethereum’s spot price action. When futures activity supports spot rallies, the market tends to move more sustainably. In contrast, falling OI typically signals the possibility of short-term corrections.
“Spot price rallies supported by the futures side progress more healthily—like a plane flying with two wings,” the analyst noted. This analogy emphasizes the importance of futures positioning in sustaining Ethereum’s bullish momentum.
Institutional Demand Adds Support
While futures metrics show short-term caution, other indicators highlight growing institutional interest in Ethereum. Another CryptoQuant analyst, PelinayPA, pointed to the Fund Market Premium (FMP), which tracks the price gap between futures contracts and spot markets.
Between July and September 2025, FMP has remained neutral to positive, suggesting that institutional investors continue to buy Ethereum through futures contracts at premiums over the spot price. Over the same period, ETH surged from $2,500 to $4,400, reinforcing the case for robust demand.
This institutional support could help Ethereum maintain stability above $4,400, while setting the stage for a potential move toward higher targets. PelinayPA even suggested a year-end goal of $6,800, supported by record demand on CME futures markets.
Exchange Reserves Continue to Deplete
Another bullish factor is the steady decline in ETH exchange reserves. When tokens are withdrawn from centralized exchanges, it reduces immediate selling pressure, often signaling accumulation by long-term holders.
A CryptoQuant contributor, Arab Chain, forecasted that this trend could drive Ethereum to $5,500 by September, citing the consistent drop in exchange balances as a key factor in supply-demand dynamics.
ETH Price Outlook
At the time of writing, Ethereum trades at $4,491, posting a modest 0.8% gain over the past 24 hours. While short-term fluctuations remain possible due to futures OI declines, analysts argue that the broader environment still favors ETH bulls.
Key technical levels include:
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Support: Around $4,400, reinforced by institutional demand and exchange outflows.
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Resistance: $5,000 remains the psychological barrier before potential upside toward $5,500 and beyond.
If Ethereum maintains stability above $4,400 while open interest levels reset, the groundwork may be laid for the next leg higher.
Conclusion
Ethereum appears to be entering a crucial phase in its price cycle. While declines in Binance open interest suggest the possibility of short-term corrections, the broader picture shows growing institutional demand, strong exchange outflows, and resilient market sentiment.
Analysts argue that ETH is either at or near its local bottom, with potential to reclaim momentum in the coming weeks. If institutional inflows continue and exchange reserves keep shrinking, Ethereum could push toward $5,500 in the short term, with a longer-term upside target of $6,800 by year-end.
For investors, the message is clear: while volatility remains, Ethereum’s fundamentals continue to strengthen, making it one of the most closely watched assets in the crypto market heading into the final quarter of 2025.
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