ETH has been one of the best-performing assets lately, witnessing a remarkable surge above $2,900 as it reached its highest point in almost two years.
Currently, Ethereum futures traders appear to be increasingly confident about the leading altcoin’s trajectory. This was evident by the significant surge in open interest which reached its peak to levels not seen since July 2022, in tandem with price.
The open interest (OI) metric across all exchanges essentially represents the total number of open futures contracts, regardless of the trade direction. Higher values signify increased confidence among futures traders in the prevailing trend, while lower values indicate uncertainty.
Open Interest Soares Alongside Price
Data compiled by CoinGlass revealed that the total open interest in Ethereum futures is currently valued at $10.5 billion, reflecting a 50% rise since the start of 2024. Binance captured the majority of OI with $3.50 billion, followed by Bybit with $1.93 billion, while OKX and Deribit comprised $1.39 billion and $1.14 billion, respectively.
The rise in open interest implies an uptick in trading volume and engagement with Ethereum derivatives, signaling increased market interest, speculation, or hedging activities associated with the crypto asset, particularly in anticipation of possible upcoming price drivers.
Despite this, chances of abrupt downside break still exist. As such, a sudden liquidation event could potentially lead to significant short to mid-term price declines, the CrytpoQuant analyst warned.
“This surge indicates sustained confidence among futures traders in Ethereum’s current uptrend. However, given the impulsive nature of the recent ascent, traders should exercise caution and consider the potential for sudden liquidation events, which could trigger notable short to mid-term price declines.”
Will Ethereum Reach an ATH in 2024?
“Notably, the chart reveals a significant surge in open interest, coinciding with #Ethereum‘s upward price trend, reaching its peak levels since July 2022.” – By @Greatest_Trader
Link 👇https://t.co/GWHqi4Q4bA
— CryptoQuant.com (@cryptoquant_com) February 19, 2024
Rising Demand for Ethereum
After a spectacular market recovery driven by the introduction of spot Bitcoin ETFs, all eyes are on the approval of a similar product that provides exposure to Ethereum. In fact, several traditional firms have already submitted their proposals for a spot Ethereum ETF.
Additionally, the rising prices have also been supported by the increased accumulation of whale entities as they anticipate a bullish revival.
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
The post appeared first on CryptoPotato
