Data shows the Ethereum Open Interest has gone up by nearly $2 billion during the past day, a sign of leveraged bets being opened.
Now, here is the chart shared by Maartunn that shows the trend in the Ethereum Open Interest over the last few weeks:
As displayed in the above graph, the Ethereum Open Interest has witnessed a rise of almost $2 billion during the past day, reflecting an increase of more than 10%. This growth in market speculation has come alongside the recovery surge that ETH has gone through over the last 24 hours. Sharp price action, like a rally, tends to attract attention to the asset, so the Open Interest usually rises alongside it.
While this trend can be normal, a particularly sharp jump in the indicator can be something to watch for. In the chart, the analyst has highlighted the instances where the derivatives market faced a similar level of overheating as now. It would appear that the last three instances all coincided with some sort of top for Ethereum. “Historically, 75% of these moves mean revert,” noted Maartunn. It now remains to be seen whether similar volatility will also follow this time.
In total, ETH spot ETFs in the US saw nearly $508 million in outflows. This is the third-largest weekly negative netflow that the funds have witnessed in their history so far.
As spot ETFs provide a regulated off-chain route into cryptocurrencies, they can be a popular mode of investment among traditional institutional entities. Considering this, the outflows can imply the presence of a negative sentiment among these large investors.
Despite the bearish mood, however, Ethereum has managed to rebound to start the new week.
Ethereum has made its way back above $3,600 with its rally of 4% in the past day.
