Ethereum (ETH) has experienced a 11.7% increase over the past week; however, indicators suggest that short-term holders are preparing to exit the market. On-chain data from Glassnode points towards a possible shift in market dynamics.

Exchange Position Changes and Market Sentiment

Since mid-May, the net position change for exchanges has been negative, indicating asset outflows from exchange-affiliated addresses. A positive shift noted on July 5 suggests that net inflows have recently outpaced outflows. This inflow could indicate a readiness among holders to sell, although it may not trigger an immediate drop in prices.

Recent findings from AMBCrypto highlighted a discrepancy in trader and developer activity. Despite a monthly TD Sequential buy signal offering some bullish sentiment, the inability of Bitcoin (BTC) to break through the $64,000 local supply zone has led to a downward price movement for Ethereum, which has slipped below $1,800.

Liquidation Trends and Open Interest Declines

Crypto analyst Darkfost noted a substantial decline in Open Interest, falling from a peak of $33.9 billion in October 2025 to $11.2 billion. This drop has raised concerns about market confidence. The liquidation volume bubble map indicated a spike in long liquidations at the end of June, equating in size to the significant liquidation events in October.

Additionally, the Coinbase Premium Index has remained negative since late April, reinforcing bearish sentiment among U.S.-based investors who have not been swayed by recent price movements towards $1,800. Notably, July has recorded $314.5 million in short liquidations as traders, anticipating further declines, were forced to exit positions following the rally.

Holder Accumulation Ratio and Distribution Trends

The Ethereum holder accumulation ratio tracks the balance of active users increasing or decreasing their holdings. A decline in this ratio since May indicates that the current distribution trend may continue. Lower ratios typically correlate with bearish momentum and profit-taking periods.

In summary, despite Ethereum's recent weekly gain of 11%, ongoing distribution trends may lead to further price declines.