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Home Ethereum

Is Ethereum Set for Recovery? Significant Drop in Open Interest May Tell

June 20, 2024
in Ethereum
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Is Ethereum Set for Recovery? Significant Drop in Open Interest May Tell
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  • Ethereum’s Open Interest has decreased, potentially easing market tensions.
  • The asset’s price shows signs of recovery, with a current rise to $3,585.

In recent developments within the cryptocurrency markets, Ethereum [ETH] has shown signs of a modest recovery after a turbulent period.

Over the last 24 hours, ETH has seen a rise of 1.5%, marking a potential turnaround from its week-long downtrend which has now culminated in a 2.5% drop.

This resurgence has allowed Ethereum to cross the significant price threshold of $3,500, trading around $3,585 at press time.

This improvement in price accompanies a notable decrease in market pressure, as evidenced by changes in Ethereum’s Open Interest (OI).

Open Interest, which aggregates the total of all open positions in the market, whether long or short, serves as a barometer for market activity and sentiment. 

Market eases as Ethereum’s OI dips

Recently, data from CryptoQuant has highlighted a significant reduction in Ethereum’s Open Interest, which dropped from a high of $13 billion to $11.5 billion. 

This reduction grants the market much-needed breathing space, potentially alleviating some of the speculative pressures that have overheated the market in recent times.

The CryptoQuant analyst particularly noted,

“Whether this pullback in OI data is sufficient will be determined by market makers, but we can say that the boiling water has cooled down a bit.”

Meanwhile, the peak in Ethereum’s Open Interest previously coincided with its all-time high price of $4,891 in 2021, reaching up to $9.5 billion during that bull run.

In contrast, the current cycle saw the OI escalate to a record $13 billion without renewing the all-time high, indicating a heightened level of market leverage and speculative interest. 

Ethereum open interest

Source: CryptoQuant

This extreme level of Open Interest led to significant market corrections, with about $400 million in Ethereum positions liquidated since early June.

See also  What do ETH and BTC ETFs convey about ongoing market trends?

$285 million of these were long positions, and $113 million were shorts, the analyst revealed.

Investors trudge on

Adding complexity to the market’s behavior, Ethereum’s active addresses have shown a decline, suggesting a decrease in user engagement or network activity.

This, per Glassnode, recently dipped from a high of 489,000 active addresses, reflecting potential shifts in investor behavior and market participation.

Ethereum active addresses

Source: Glassnode

Concurrently, IntoTheBlock’s data indicated ongoing accumulation activities among Ethereum investors, despite the market’s challenges.

Over the past week, Ethereum saw a net outflow from exchanges exceeding 400,000 ETH, signaling strong investor confidence and potential anticipation of price appreciation.

Ethereum outflow on Exchange

Source: IntoTheBlock


Read Ethereum’s [ETH] Price Prediction 2024-2025


The trend is supported by a report from AMBCrypto, which noted that Ethereum’s exchange supply has hit an eight-year low.

This coincided with a surge in large transactions (over $100k), which have increased significantly in just the past week. 

Ethereum large transactions

Source: IntoTheBlock

Next: Ethereum vs. Bitcoin: How a key metric points to ETH as the winner

READ ALSO

Ethereum Looks Ready To Break Out Of 4-Year Consolidation, Analyst Says Price Will ‘Go Insane’

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  • Ethereum’s Open Interest has decreased, potentially easing market tensions.
  • The asset’s price shows signs of recovery, with a current rise to $3,585.

In recent developments within the cryptocurrency markets, Ethereum [ETH] has shown signs of a modest recovery after a turbulent period.

Over the last 24 hours, ETH has seen a rise of 1.5%, marking a potential turnaround from its week-long downtrend which has now culminated in a 2.5% drop.

This resurgence has allowed Ethereum to cross the significant price threshold of $3,500, trading around $3,585 at press time.

See also  Ethereum price prediction: Watch out for THESE short-term targets!

This improvement in price accompanies a notable decrease in market pressure, as evidenced by changes in Ethereum’s Open Interest (OI).

Open Interest, which aggregates the total of all open positions in the market, whether long or short, serves as a barometer for market activity and sentiment. 

Market eases as Ethereum’s OI dips

Recently, data from CryptoQuant has highlighted a significant reduction in Ethereum’s Open Interest, which dropped from a high of $13 billion to $11.5 billion. 

This reduction grants the market much-needed breathing space, potentially alleviating some of the speculative pressures that have overheated the market in recent times.

The CryptoQuant analyst particularly noted,

“Whether this pullback in OI data is sufficient will be determined by market makers, but we can say that the boiling water has cooled down a bit.”

Meanwhile, the peak in Ethereum’s Open Interest previously coincided with its all-time high price of $4,891 in 2021, reaching up to $9.5 billion during that bull run.

In contrast, the current cycle saw the OI escalate to a record $13 billion without renewing the all-time high, indicating a heightened level of market leverage and speculative interest. 

Ethereum open interest

Source: CryptoQuant

This extreme level of Open Interest led to significant market corrections, with about $400 million in Ethereum positions liquidated since early June.

$285 million of these were long positions, and $113 million were shorts, the analyst revealed.

Investors trudge on

Adding complexity to the market’s behavior, Ethereum’s active addresses have shown a decline, suggesting a decrease in user engagement or network activity.

This, per Glassnode, recently dipped from a high of 489,000 active addresses, reflecting potential shifts in investor behavior and market participation.

Ethereum active addresses

Source: Glassnode

Concurrently, IntoTheBlock’s data indicated ongoing accumulation activities among Ethereum investors, despite the market’s challenges.

See also  Ethereum ETF's '25% odds' - SEC wants to 'get it right,' but at what cost?

Over the past week, Ethereum saw a net outflow from exchanges exceeding 400,000 ETH, signaling strong investor confidence and potential anticipation of price appreciation.

Ethereum outflow on Exchange

Source: IntoTheBlock


Read Ethereum’s [ETH] Price Prediction 2024-2025


The trend is supported by a report from AMBCrypto, which noted that Ethereum’s exchange supply has hit an eight-year low.

This coincided with a surge in large transactions (over $100k), which have increased significantly in just the past week. 

Ethereum large transactions

Source: IntoTheBlock

Next: Ethereum vs. Bitcoin: How a key metric points to ETH as the winner
Tags: DropEthereumInterestOpenrecoverysetSignificant

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