Ethereum has held above $2,250 as the market moves toward what feels like a decisive move in either direction. The recovery from February’s lows was real and sustainable – but according to top analyst Darkfost, the participants who should be most convinced are doing the opposite of what conviction looks like.
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The context behind that observation starts with how severe the previous correction was. ETH fell about 65% from its last peak – a drop that made it one of the hardest-hit assets in a downturn that damaged the entire altcoin market. TOTAL2, which measures the combined market capitalization of altcoins excluding Bitcoin and stablecoins, lost more than 51% of its value over the same period. The sale was broad, deep and extensive enough to leave lasting marks on the psychology of the participants.
The recovery since then has been meaningful. Ethereum is now trading over 30% above the low it hit on February 6 – a recovery that in any normal market environment would attract new buyers and build a bullish consensus.
That consensus has not formed. Darkfost’s data shows that despite the 30% recovery, most investors are still not convinced. They don’t sit on the sidelines waiting for confirmation. They are actively taking aggressive short positions in a market that has already moved significantly higher – a stance that is creating a specific dynamic that the data is now revealing.
The last time funding looked like this, the bear market ended
Darkfost’s funding rate facts is where the arrangement becomes historically significant. Throughout Ethereum’s 30% recovery from February lows, funding rates on Binance have remained persistently negative – not momentarily, not as a daily fluctuation, but as a persistent, months-long condition that reflects the collective positioning of participants who refuse to believe the recovery is real.
The monthly average financing rate is currently -0.0018. The last time funding remained this negative for so long was November 2022 – during the FTX collapse, at the end of the previous bear market. Darkfost notes that the current environment is fundamentally not comparable to that moment. What is similar is the behavioral fingerprint: a market that recovers, while the majority of derivatives participants are aggressive and continually pay to maintain short positions even as the price rises.
That bet already comes at a cost. The volume of short liquidations has increased as Ethereum’s upward momentum forces overextended positions out of the market. Each forced liquidation removes a short and increases buying pressure, allowing the recovery to feed as more shorts are caught and closed.
Markets rarely reward the kind of consensus that currently surrounds Ethereum’s short side. The parallel in the FTX era is not a prediction. It reminds us that the strongest movements begin at the precise moment when most people are resisting them.
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Ethereum tests structure while momentum remains below resistance
Ethereum is trading around $2,280, after a steady recovery from February’s capitulation low of nearly $1,800, but the chart shows the market losing momentum as it approaches a key resistance cluster. The price is now compressing between the rising short-term trend (around the 50-day moving average) and the falling 100- and 200-day moving averages, which continue to slope downward and limit upside attempts.
The recent structure is constructive, but not yet bullish. Higher lows since mid-March indicate accumulation, yet any momentum towards the $2,350-$2,450 region has been rejected, leaving a clear supply zone. This repeated failure suggests that sellers remain active at higher levels and are likely using rallies to distribute.
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Volume increases hesitation. The recovery phase does not match the intensity of the February sell-off, implying that the current move lacks strong conviction. Buyers are present, but not aggressive enough to decisively absorb the overhead supply.
From a structural point of view, Ethereum is rolling up. A clear break above $2,450 would shift momentum and open the way to regaining the $2,700 region. Conversely, the loss of the support area between $2,200 and $2,250 would invalidate the higher-low structure and expose the market to a deeper retracement towards $2,000 or lower.
Featured image of ChatGPT, chart from TradingView.com