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Ethereum Open Interest Gains $1 Billion – Impact on ETH?

Ethereum Open Interest Gains  Billion – Impact on ETH?
  • While open interest rose, the financing rate stalled.
  • The altcoin price may continue to fluctuate between $3,400 and $3,600 in the short term.

One day after Ethereum [ETH] Open interest fell to $13.14 billion, adding another billion to its value. At press time, open interest (OI) reached $14.10 billion, according to data from Glassnode.

OI is the value of futures contracts outstanding in the market. Whenever it decreases, it means that traders are closing positions related to the cryptocurrency. But the increase indicates otherwise.

Speculation is a ticket to a new high

This indicates the rise in Ethereum contracts Increased speculative activity Regarding alternative currency. In many cases, an increase in OI provides strength to the price trend.

For ETH, it may be no different. As of this writing, ETH is trading at $3,563, representing a slight increase of 1.10% over the past hour.

By the looks of things, this could be the start of a major uptrend for the cryptocurrency.

Open interest on Ethereum rises

Source: Glassnode

However, trading volume decreased by 35.36% over the past 24 hours. The decrease in trading volume is a sign that ETH activity has been less in the spot market.

If spot market activity continues to decline while trading increases in the derivatives market, ETH price may stall around the $3,500 to $3,600 area.

But if buying pressure increases in the spot market, the altcoin could jump towards $3,800.

Doubts remain

Despite expectations, the Ethereum funding price has remained stagnant since June 8th. The funding rate is the cost of holding an open position in the derivatives market.

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If financing is positive, it means that the contract price is trading at a premium to the spot price. In such a situation, long position holders pay shorts to keep their positions open.

On the other hand, passive financing means that short trades drive long trades. The value of the cryptocurrency contract is also reduced.

For ETH, low funding rate and high price means This spot volume may start to improve soon.

If this is the case, a reasonable inference might be an upward movement for Ethereum. However, the cryptocurrency price may fail to reach $4,000 next week.

Ethereum's funding rate indicates a bullish outlookEthereum's funding rate indicates a bullish outlook

Source: Santiment

In addition, AMBCrypto looked at the selling ratio of beneficiaries. To get this ratio, we need to divide the sale volume by the total perpetual swap.

When the ratio is less than 0.5, it means that selling pressure has decreased. However, a value higher than 0.5 indicates… Selling is dominant In the market.


Realistic or not, this is the market cap of ETH in terms of BTC


As of this writing, the recipient sell-through ratio for Ethereum is 0.50, according to data from CryptoQuant. If the condition remains the same, ETH price may have difficulty approaching $4,000 as we mentioned earlier.

Next week, the value of the cryptocurrency may trade between $3,400 and $3,600 as it happened in previous weeks.

Next: Solana Outperforms Bitcoin and Ethereum on This Front: Will SOL Rise Too?