Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com<\/div>\n","protected":false},"excerpt":{"rendered":"
Data shows the Ethereum Open Interest has witnessed some sharp growth recently, a sign that more volatility could be coming for the asset’s price. Ethereum Open Interest Has Now Risen To $9.7 Billion As explained by an analyst in a CryptoQuant Quicktake post, the Ethereum Open Interest has seen a strong rise recently. The “Open Interest” is an indicator that keeps track of the total amount of ETH-related positions currently open on all derivatives platforms. When the value of this metric goes up, it means the investors are opening up new positions on the market right now. As new positions generally come with leverage attached to them, the overall leverage in the market rises when the Open Interest does. So, the asset’s price can become more likely to show volatility. Related Reading: Ethereum Could Push To $6,000 If This Pattern Holds, Analyst Says On the other hand, the indicator registering a decline implies the holders are either closing up positions of their own volition or getting liquidated by their platforms. Either way, the reduced leverage can lead to more stability for the cryptocurrency. Now, here is a chart that shows the trend in the Ethereum Open Interest over the past month: As the above graph shows, the Ethereum Open Interest has seen a spike recently as the cryptocurrency’s price has shown its recovery run. This isn’t particularly unusual, as rallies tend to attract a lot of attention and, with such interest, naturally follow a ton of speculation. However, the scale of the increase could be something to watch out for. From the chart, it’s apparent that this latest Open Interest increase has outweighed the September spike. A zoomed-out version of the chart shows that the last time the metric saw a larger 24-hour rise was back in May. As mentioned earlier, an Open Interest increase can lead to more volatility in the price. This is because a mass liquidation event, popularly known as a squeeze, can become more likely to occur if the market is more leveraged. In theory, this volatility can take Ethereum in either direction. However, the quant has pointed out that the funding rates are currently high, which suggests the sector is leaning towards being long-heavy. Thus, most of the new positions that have popped up on exchanges are likely long. Related Reading: Solana Extends Rally By 4%, But This Factor Could Lead To A Top Historically, conditions like these have created a ripe environment for a long squeeze. It remains to be seen how the coin develops in the coming future and whether a sharp correction in its price will occur alongside large long liquidations. ETH Price At the time of writing, Ethereum is trading at around $2,600, up more than 8% over the past week. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com<\/p>\n","protected":false},"author":542,"featured_media":648112,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[13625],"tags":[8323,1946,92140,86497,16746,78803],"class_list":["post-648070","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ethereum","tag-eth","tag-ethereum","tag-ethereum-derivatives","tag-ethereum-open-interest","tag-ethereum-volatility","tag-ethusdt"],"acf":[],"yoast_head":"\n
Ethereum Open Interest Sees Fastest Rise In 5 Months: Brace For More Volatility?<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n