Ethereum’s derivatives market may be signaling bullish momentum today, with futures open interest rising by over 12% to reach an all-time high of $20.8 billion.
Ethereum Futures Open Interest Surpasses $20 Billion, Reaching All-Time High:
This follows a 7% price increase in the last 24 hours that took Ethereum to $3,365.
Open interest, which measures the total number of contracts outstanding in a derivatives market, has reached unprecedented levels for Ethereum, with analysts attributing the increase to growing bullish sentiment among derivatives traders.
According to a CryptoQuant report, the Ethereum OI-weighted futures funding rate has risen multiple times over the past week, reaching all-time positive highs, indicating the dominance of long traders.
The ratio currently stands at 0.0374%, according to Coinglass data. “This points to a market sentiment that favors upward price action in the short term,” the CryptoQuant report added.
Ethereum’s futures market has seen significant growth in recent months. According to CryptoQuant data, Ethereum’s open interest has surged by over 40% in the past four months, surpassing $20 billion and surpassing the previous high of over $17 billion in May.
“Ethereum’s derivatives market activity reflects increasing investor participation, with futures open interest recently exceeding $20 billion for the first time,” a CryptoQuant analyst wrote.
Funding rates are currently positive, indicating that the market is biased towards long positions or bets on rising prices.
Additionally, Ethereum’s estimated leverage ratio (a measure of open interest divided by exchange reserves) has risen to a new record 0.40.
This suggests increased risk-taking among investors as they use higher leverage to increase potential returns.
However, the CryptoQuant report warned that high leverage and the dominance of long positions could increase the risk of a prolonged squeeze. “Sudden price swings could trigger liquidations, leading to market corrections,” the CryptoQuant report said.
*This is not investment advice.
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