Ethereum Price Prediction: Is the Flash Crash a Buying Opportunity for Long-Term ETH Holders?

Cryptocurrency Ethereum
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Is Ethereum’s $3,500 dip a buying opportunity? Funding rates flip negative as ETH price prediction turns speculative.
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Crypto Writer
Crypto Writer
Arslan ButtVerified
Part of the Team Since
Sep 2022
About Author

Arslan Butt is an experienced webinar speaker, market analyst, and content writer specializing in crypto, forex, and commodities. He provides expert insights, trading strategies, and in-depth analysis...

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

Ethereum (ETH/USD) has faced a sharp market correction, sliding from near $4,300 to a low of $3,510 before partially recovering to around $3,830. The decline came as part of a broader crypto selloff, triggered by global market jitters and nearly $19 billion in liquidations, one of the biggest single-day wipeouts this year.

Despite the shock, some market signals suggest that Ethereum’s latest pullback could present a potential buying opportunity for long-term investors.

Derivatives Market Shows Contradictory Signals

Ethereum’s open interest increased as the price decreased. This means people are opening new positions rather than closing, so they must be confident or accumulating ahead of a bounce. Historically, when open interest goes up during a downtrend, it often precedes a period of high volatility or a reversal.

Ethereum Interest Rates – Source: Cryptoquant

Meanwhile, the funding rate, which is the cost of holding long or short positions in perpetual futures, flipped from +0.0029% on October 9 to -0.019% on October 11. This is negative, so shorts are now paying longs, so most people are betting on further down.

Ethereum Funding Rates – Source: Cryptoquant

However, when shorts become too crowded, even a small upward move can trigger a short squeeze, forcing bears to close their positions and accelerating the price upward.

In short:

  • Rising open interest = more traders taking positions.
  • Negative funding = bearish sentiment building.
  • Both combined = setup for a potential volatility spike or rebound.

Ethereum’s Technical Outlook: Key Levels to Watch

Ethereum price prediction seems bearish; however, ETH is attempting to stabilize around $3,840 after rebounding from its intraday low of $3,720. The 4-hour chart shows ETH breaking free from a descending channel, hinting at a short-term recovery if resistance levels hold.

The RSI recently bounced from an oversold reading of 24, suggesting selling pressure is easing. At the same time, the MACD histogram is flattening out, a typical early signal that bearish momentum may be fading. Fibonacci retracement levels reinforce these patterns.

Ethereum Price Chart – Source: Tradingview

Ethereum is hovering near the 23.6% retracement ($3,719) and now eyeing the 38.2% to 50% retracement range ($3,847–$3,951).

If Ethereum can break above $4,055, it could invalidate the short-term down trend and lead to $4,330-$4,393, where the 100-day MA is. On the flip side, a close below $3,720 could lead to $3,511, which is a key psychological support.

Ethereum Trade Setup and Market Outlook

For traders, the short-term setup looks cautiously optimistic. A buy-on-dip opportunity could emerge between $3,720–$3,800, with a stop-loss near $3,680 and profit targets around $4,050–$4,390.

The broader trend remains intact, supported by sustained open interest and evidence of early accumulation at lower price levels.

If macro volatility eases and funding rates normalize, Ethereum could regain momentum and retest $4,500 later this month. For long-term holders, the recent flash crash might represent not panic, but potential value.

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