Ether (ETH) traded back above $2,000 on Friday, extending its gains after the U.S. Consumer Price Index (CPI) got here in cooler than expected.
The rally put ETH/USD on course for its first bullish weekly candle close since mid-January and fueled speculation of a rally towards $2,500.
Key Takeaways:
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Open interest in Ether futures fell by 80 million ETH in 30 days and funding rates reached their lowest level in three years, indicating an easing bearish trend.
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ETH price has reached strong support around $2,000, a level that should be maintained to make sure recovery.
ETH/USD hourly chart. Source: Cointelegraph/TradingView
Open interest in Ether drops by 80 million ETH
Data from CryptoQuant shows that open interest (OI) for Ether futures on all major exchanges has fallen by over 80 million ETH within the last 30 days.
Binance, the world's largest cryptocurrency exchange by trading volume, recorded the biggest decline of around 40 million ETH (50%) within the last 30 days.
Ether's OI on the Gate exchange fell by greater than 20 million ETH (25%), while Bybit and OKX saw a decline of 8.5 million ETH and 6.8 million ETH, respectively. Cumulatively, the 4 major platforms saw a complete drop of about 75 million ETH, while other platforms accounted for the remaining five million ETH, confirming that the phenomenon is widespread and never limited to a single exchange.
This suggests that leveraged traders are “reducing their exposure reasonably than opening recent positions,” said CryptoQuant analyst Arab Chain in a Quicktake evaluation.
This significant decline in OI amid falling prices “could be seen as a clean-up of weaker positions, thereby reducing the likelihood of drastic forced liquidations down the road,” the analyst said, adding:
“This environment could pave the best way for a period of relative stability or the formation of a more solid price base for Ethereum within the near future.” 
ETH Open Interest 30 Day Exchange. Source: CryptoQuant
The financing rates of interest for Ether futures on Binance have plunged deep into negative territory at -0.006, marking the bottom value for the reason that starting of December 2022.
“It suggests that bearish sentiment has reached an extreme peak not seen within the last three years,” CryptoQuant contributor CryptoOnchain said in a quicktake evaluation on Thursday.
Historically, a brief squeeze is usually preceded by extremely negative financing rates with high levels of price support.
“When the gang is convinced that prices will proceed to fall, the market tends to maneuver in the wrong way to liquidate late bears,” the analyst said, adding:
“Current data suggests we could also be witnessing a classic capitulation event, mirroring the underside formed in late 2022 and potentially setting the stage for a robust recovery.” 
Ether futures find prices. Source: CryptoQuant
As Cointelegraph reported, Ether's increasing network activity and increasing inflows from institutional investors are a big tailwind for near-term ETH price appreciation.
ETH price technicals: Bulls have to keep Ether above $2,000
The ETH/USD pair broke out of a falling wedge on the four-hour chart and was trading at $2,050 on the time of writing.
The measured goal of the falling wedge, calculated by adding the utmost height of the wedge to the breakout point at $1,950, is $2,150.
Furthermore, the value could rise to retest the 100-period easy moving average (SMA) at $2,260 and later towards $2,500.
ETH/USD four-hour chart. Source: Cointelegraph/TradingView
On the opposite hand, a vital area to carry is the psychological level of $2,000, which is enclosed by the 50-period SMA, as shown within the chart below.
Glassnode's cost base distribution heatmap shows a recently established significant support area between $1,880 and $1,900, where investors have purchased around 1.3 million ETH.
Heatmap of ETH's cost base distribution. Source: Glassnode
As Cointelegraph reported, Ether accumulation addresses saw a surge in every day inflows as ETH fell below $2,000 last week, signaling strong investor confidence in its long-term potential.
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