Ethereum Open Interest Hits Record High Of $17 Billion — Bearish Or Bullish For ETH Price?
The price of Ethereum has had a stellar past week, returning to the $3,500 mark for the first time since July 2024. This single-week performance represents a change in fortunes for the “altcoin king”, which has seen its momentum slow down after a promising start in November.
While Ethereum’s current price setup suggests there is still room for upside, certain on-chain signals suggest the market may be on the verge of a pullback. One of these signals is ETH Open Interestrecently hit a record high.
Open interest surges, is ETH price at risk?
In a quick post on the CryptoQuant platform, an analyst who goes by the pseudonym ShayanBTC said disclose Although Ethereum price action currently looks bullish, investors need to proceed with caution. This prediction is based on an “alarming difference” in ETH futures market indicators.
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Specifically, the relevant futures market indicator here is Open Interest, which tracks the total amount of open futures or derivatives contracts on the market for a specific cryptocurrency (in this case, ETH) at a specific time. It basically measures the amount of money being pumped into Ethereum futures at every moment.
According to data Crypto quantizationEthereum open interest has reached an all-time high of $17 billion. Typically, a surge in open interest signals a shift in investor sentiment, with traders increasingly speculating and preparing for potential market moves.
However, ShayanBTC noted that the significant spike in open interest was not accompanied by a new all-time high for Ethereum price. According to Quicktake experts, this difference between price and open interest indicates that volatility is likely to increase and a chain reaction of massive liquidations will occur.
ShayanBTC added:
If the price of Ethereum suddenly drops or consolidates, over-leveraged positions by futures traders could trigger a wave of forced liquidations, causing the price to drop rapidly.
As of this writing, Ethereum price The price is just below $3,700, up more than 3% in the past 24 hours. According to data from CoinGecko, the altcoin’s value has increased by nearly 8% in the past seven days.
Ethereum whales load their bags
Serendipitously, another on-chain data emerged to offset the pessimistic forecasts for the second-largest cryptocurrency. Ali Martinez, a well-known cryptocurrency analyst, in an article published on the X platform on November 30 disclose A specific category of large Ethereum investors has been active in the market.
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Data from CryptoQuant shows that Ethereum whales holding between 100,000 and 1,000,000 tokens purchased more than 280,000 ETH in the past four days. This level of buying activity from such an influential investor class could be considered positive for the altcoin.
Featured image created by DALL-E, chart from TradingView
