Ethereum is holding above $2,250 as the market builds towards what feels like a definitive move in either direction. The recovery from February’s lows is real and sustained, but top analyst Dirkforst says the participants who should be most convinced of it are doing the opposite.
The context behind that observation starts with how severe the last correction was. $ETH It’s down about 65% from its previous peak. This decline has made it one of the hardest hit assets during the recession that has damaged the entire altcoin market. TOTAL2, which measures the total market capitalization of altcoins excluding Bitcoin and stablecoins, has lost more than 51% of its value over the same period. The pitch was broad and deep, far-reaching enough to leave a lasting mark on the psyches of the participants.
The recovery since then has been meaningful. Ethereum is currently trading more than 30% above its February 6th low, a recovery that under normal market conditions would have attracted new buyers and built a bullish consensus.
That consensus has not formed. Despite the 30% recovery, most investors remain unconvinced, according to Darkhost data. They don’t sit on the sidelines and wait for approval. They are actively taking aggressive short positions in a market that is already up significantly. This attitude establishes certain dynamics that are revealed by the data.
The last time the funding looked like this, the bear market was coming to an end
Darkfost’s funding rate data is where this setting becomes historically important. Binance’s funding rate remained consistently negative during Ethereum’s 30% recovery from its February lows. Rather than a temporary, daily fluctuation, it is a persistent month-long state that reflects the collective refusal of participants to believe that rebound is real.
The average monthly funding rate is currently -0.0018. The last time funding remained negative for this long was in November 2022, during the FTX collapse at the end of the last bear market. Dirkforst notes that today’s environment cannot be compared in any fundamental sense to then. Comparable to this are behavioral fingerprints. Although the market is recovering, the majority of derivatives participants are actively positioned against the market and persistently pay to maintain their short exposure even as prices rise.
That bet has already extracted costs. Short liquidations are increasing as Ethereum’s upward momentum forces overleveraged positions out of the market. Each liquidation eliminates short sales, adds buying pressure, and allows the recovery to run on its own as more short sales are captured and closed.
The market rarely rewards consensus like the one currently surrounding the short side of Ethereum. The similarities in the FTX era are not predictive. This is a reminder that the strongest movements tend to be initiated precisely when the most people are in a position to oppose them.
Ethereum stalls momentum below resistance, testing structure
Ethereum has steadily recovered from its February capitulation lows around $1,800 and is trading around $2,280, but the chart shows the market losing momentum as it approaches a major resistance cluster. Price is currently compressed between an ascending short-term trend (near the 50-day moving average) and the descending 100-day and 200-day moving averages, continuing the downtrend and limiting any upside attempts.
Recent structure is constructive, but not yet bullish. A rise in the lows since mid-March indicates accumulation, but a push into the $2,350-$2,450 area has been rejected, forming a clear supply zone. This repeated failure suggests that the seller continues to operate at a higher level, perhaps using rallies to distribute.
The volume intensifies the hesitation. The recovery phase has fallen short of the momentum seen during the February sell-off, suggesting a lack of conviction in the current move. Buyers exist, but they are not active enough to absorb indirect supply decisively.
From a structural perspective, Ethereum is spiral-shaped. A clean break above $2,450 would change momentum and pave the way for a return to the $2,700 area. Conversely, a loss of the $2,200-$2,250 support area would invalidate the high-low structure and expose the market to a deeper retracement towards below $2,000.
Featured image from ChatGPT, chart from TradingView.com
