Key Takeaways
Why do Coinbase analysts say ETH is in a ‘buy the dip’ zone?
They argued that the recent pullback and neutral Options positioning signal a favorable level for buyers.
What do Futures data reveal about sentiment?
Data signaled strong speculation, long-biased leverage, but not an overheated market.
Ethereum [ETH] price has pulled back about 10% from the recent all-time high (ATH) of $4.95K hit in August.
Although the recovery push in September lifted the altcoin close to the level again, the post-Fed rate decision sell-off dragged it lower to $4.5K.
Still, the current ETH level could be a great buying opportunity, according to Coinbase analysts, citing the Options market positioning and valuation model. They noted,
“The six-month skew is closer to flat (and falling), indicating near-term event hedging alongside a more neutral medium-term stance—conditions that we think support a “buy the dip” environment.”
Source: Coinbase/Glassnode (ETH options 25-Delta Put-Call Skew)
The slight spike in 1-month tenor (blue) for 25 Delta Skew showed a small premium for puts (bearish bets, hedging) over calls (bullish bets).
But the 6-month tenor (grey) was dropping (a decline in demand for bearish bets). This meant that despite a little caution in the near term, the mid-term outlook into Q4 was fairly positive.
Other datasets supported the positive positioning.
Long-leverage bias, but market isn’t overheated yet
Notably, at press time, the Open Interest (OI) across the Futures market was at record highs near $30 billion. Additionally, the Perpetual Funding Rates were positive, a condition that Coinbase analysts, led by David Duong, said,
“Signaling a long-biased leverage regime that can fuel trend continuation yet amplifies liquidation risk around negative catalysts.”
Source: Coinbase
This meant ETH had a massive speculative interest-A bullish sign. Besides, the Funding Rates were below 0.04-0.06 levels that marked the previous local top in 2024 and 2025.
Simply put, the market was not overheated (less frothy), to warrant concern in the Futures market.
Finally, the MVRV Z-score, a valuation model, had a reading of 2, unlike 4-7 levels seen in the past cycle peaks.
In short, the altcoin still had room for growth if past patterns repeat. In fact, the recent 25bps Fed rate cut was another catalyst for risk appetite, added Duong.
Source: Coinbase
On the price charts, ETH has been consolidating tightly between $5K and $4K. The compression channel could become a springboard towards $5.5K target in case of a bullish breakout.
Source: ETH/USDT, TradingView
However, Duong warned that the massive amount of ETH waiting to be unstaked could become mid-term selling pressure if they aren’t locked or absorbed by treasury firms.
“If the exited ETH is restaked or returned to institutional custody, we think the effect will be largely neutral. But, if a meaningful share moves to exchanges, the market inherits a new pocket of potential supply.”
