Ethereum Open Interest Nears All-Time Highs Ahead Of Merge

Data shows that open interest on Ethereum has risen to nearly all-time highs as the ETH 2.0 consolidation approaches.

Open interest on Ethereum has risen sharply lately

According to the latest weekly report from obscure researchIn recent days, open interest in ETH in futures and clients has risen to 4.2 million ETH.

The “frank interest“It is an index that measures the total amount of Ethereum futures and perps contracts currently open in the market (denominated in ETH). The metric includes shorts and longs.

When the value of this indicator is high, it means that there are currently a large number of open contracts in the market. These values ​​usually lead to higher fluctuations in the price of the cryptocurrency.

On the other hand, low values ​​of the scale indicate that many contracts are closed in the market. This can lead to less volatility of the currency.

Now, here is a chart showing the trend in Ethereum futures and open interest over the past year:

Open interest on Ethereum

The value of the metric seems to have moved up recently | Source: Arcane Research's The Weekly Update - Week 31, 2022

As you can see in the chart above, Ethereum noticed an uptrend opening last week and is now near the all-time high.

The present value is the second highest value ever recorded for the index, just below 4.21 million ATH on July 14 this year.

While massive hedging amid arbitrage opportunities like the bankruptcy of Celsius was behind the recent peak, the report notes that the current rally is likely caused by trading strategies ahead of time. 2.0 merge.

The ETH futures market is also noticing massive cuts at the moment. Normally, high open interest and negative basis like now lend to potential short squeeze (An event in which short liquidations cascade together due to a sudden price swing).

But Arcane Research notes that the recent increase in leverage is likely from more conservative risk management, which means that any potential short squeeze that might occur currently won’t be very significant.

ETH . price

At the time of writing, the price of Ethereum is hovering around $1.7K, down 1% in the past week. Over the past month, the value of the cryptocurrency has gained 40%.

The chart below shows the currency price trend over the past five days.

Ethereum price chart

Looks like the value of the crypto has come down during the last two days | Source: ETHUSD on TradingView
Featured image from Kanchanara on, charts from, Arcane Research

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