Data shows that Ethereum open interest has increased by nearly $2 billion over the past day, a sign that leveraged betting has begun.
Ethereum Open Interest has seen a strong upward trend.
As CryptoQuant community analyst Maartunn points out in a new post on X, Open Interest has just risen for Ethereum. This indicator tracks the total volume of ETH-related derivatives positions currently open on all centralized exchanges.
When the value of an indicator rises, it means that investors are taking new positions in the market. Typically, the overall leverage of the sector increases with new positions, so this trend could make the asset more volatile. On the other hand, a falling indicator means that the number of positions is decreasing, either as a result of intentional closures or forced liquidations. This kind of deleveraging could lead to a more stable ETH price.
Now here is a chart shared by Maartunn showing the trend of Ethereum Open Interest over the past few weeks:
The value of the metric seems to have been going up in recent days | Source: @JA_Maartun on X
As shown in the graph above, Ethereum open interest has increased by almost $2 billion over the past day, reflecting an increase of over 10%. This increase in market speculation comes alongside the recovery surge that ETH has experienced over the past 24 hours. Abrupt price action, such as a rally, tends to attract interest in an asset, so open interest typically rises along with the asset.
While this trend may be normal, a particularly sharp rise in the indicator may be something to watch out for. In the chart, the analyst highlights instances where the derivatives market is facing similar levels of overheating. The last three cases all appear to coincide with Ethereum’s highest levels. “Historically, 75% of these movements represent a comeback,” Maartunn said. It remains to be seen whether similar volatility will follow this time around.
In other news, the Ethereum spot exchange-traded fund (ETF) has seen net outflows over the past week, as shown by data from SoSoValue.
How the weekly netflow related to ETH spot ETFs has changed since their conception | Source: SoSoValue
In total, the US ETH spot ETF recorded outflows of nearly $508 million. This is the third largest weekly negative net flow in the fund’s history to date.
Spot ETFs could become a popular investment mode among traditional institutional groups as they provide a regulated off-chain path to cryptocurrencies. Taking this into account, these outflows could suggest the presence of negative sentiment among large investors.
However, despite the bearish sentiment, Ethereum bounced back to start the new week.
ETH price
Ethereum rose 4% in the past day, exceeding $3,600.
The trend in the ETH price over the last five days | Source: ETHUSDT on TradingView
Dall-E, SoSoValue.com, featured image from CryptoQuant.com, chart from TradingView.com
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