Ether futures open interest reached a record $22 billion, marking a 23% growth from Oct. 27 to Nov. 27. The rise signals a fresh bull run in ETH. This growth coincided with ETH’s 15% rise to attain $3,500 between November 20 and November 27, highlighting intensive market activities.
A crypto analyst, Michaël van de Poppe, is optimistic that this is just the beginning. According to his X report, ETH will soon hit $4,000 as he feels that cryptocurrency is consolidating while altcoins have begun shooting up.
#Bitcoin didn’t reach the area of interest, yet.
Just a period of consolidation taking place, through which you can see that #Altcoins are starting to fire off.
Nice stuff, I think we’ll still see $100K this year, but I think we’ll also see $ETH at $4,000. pic.twitter.com/yvtfR2y86o
— Michaël van de Poppe (@CryptoMichNL) November 27, 2024
Ethereum lovers are excited with the surge in Ether futures open interest
Ethereum lovers are enjoying the unprecedented growth of its futures open interest. Most crypto merchants are enticed by price growth, hoping the trend will continue. Binance, Bybit, and OKX dominate the Ether futures market, jointly accounting for 60% of overall demand.
Ether futures aggregate open interest, Source: CoinGlass
Still, there are risks if price volatility triggers liquidation. Such a scenario always leaves the market at a crossroads since it’s challenging to predict which way the market will swing.
The ETH price surge to $3,500 is the most robust recovery since mid-2023. Around May, when the coin traded at $4,000, futures open interest was at $14 billion, $8 billion less than today’s value. The severe growth shows the market’s enthusiasm, although ETH still lags behind its historic peak.
Ethereum’s recent rally is due to several factors. First, there has been growing institutional interest in the crypto-based financial products. The Ethereum blockchain is also among the most secure and reliable blockchains. Additionally, the increasing adoption of DeFi is a reasonable catalyst, as are improving macroeconomic sentiments.
Should investors worry about the market leverage, or is it beneficial to them?
Rising futures open interest is usually a promising market sign. However, excessive leverage can be cut both ways. In a highly leveraged market, sharp price corrections can lead to liquidation. Given this risk, it is essential to monitor funding rates, which may show whether the leverage is leaning toward bullish or bearish positions.
To this moment, market analysts are unsure what the surge in open interest means for ETH’s short-term trajectory. Investors have gained confidence in the cryptp’s ecosystem, while others think that people should trade cautiously or the market will experience volatility.
