Safe (safe) 
Ethereum price dropped below $3,250 on March 19, marking a 20% decline from its recent peak. However, recent trends in the derivatives market suggest a potential rebound for ETH.
Despite losing over $78 billion in market capitalization over the past week, Ethereum shows signs of a possible recovery in both spot and derivatives markets.
Ethereum derivatives traders are opting to hedge their positions rather than exit entirely, indicating a level of optimism for a potential turnaround.
Open interest data from Coinglass, which represents the total capital invested in futures contracts for Ethereum, shows that while the ETH price has dropped significantly, open interest has only declined by 6.4%. This suggests that bullish speculative traders may be hedging their positions rather than selling off, potentially leading to increased demand for ETH.
Strategic investors may find this market rebound signal favorable for various reasons. Long traders who hedge their positions are less likely to sell off their holdings during price dips, which could contribute to a higher demand for Ethereum and drive up prices.
Additionally, the presence of a large support cluster at the $3,200 level, as indicated by IntoTheBlock’s data, could prevent further downward movement for ETH if long traders continue to cover their positions.
Recent news of Fidelity adding a staking feature in its spot Ethereum ETF filing could also boost bullish sentiment in the market. However, reclaiming the $3,500 territory may pose a challenge due to resistance from a significant number of addresses that acquired ETH at an average price of $3,411.
As a result, a consolidation phase within the $3,200 to $3,400 range is the likely scenario for Ethereum price action in the near future.
