Finally, Ethereum is reaching at least some kind of an ATH. Unfortunately, we have a problem here: it is not the price ATH. But one way or another, it is something, considering the dull performance the second-biggest cryptocurrency has been showing. But do not fret, the price might catch up in the future.
What even is open interest? It is the total amount of open contracts for the asset, like futures or options. The surge of OI usually suggests the overall growth of interest in the asset on the market. But do not rush to buy it yet since it is not an indicator of some crazy growth – it is simply a reflection of the rising volume.
In just three days we saw a massive 30% surge in open interest. The new all-time high of $11 billion was secured. The key reason behind it is obviously the potential approval of the Ethereum ETF. Since the social volume around the topic surges, more people are trying to catch some quick profits.
Additionally, funding rates turning positive bring some bullishness to the table. With the flip, longs will start paying short contract holders a certain amount of interest. With positive funding rates, more traders are likely to bet on the growth of the asset rather than its fall.
Of course, we should also evaluate the charts. The price has been rallying, and with open interest surging, it is no surprise that a lot of investors are getting back to Ether. Key moving averages like 50,100 and the 200-day were broken, which is hopefully an obvious hint at an upcoming bull market.
As for secondary indicators, volume is currently spiking, hinting at trading activity. The price jump was backed by an adequate market reaction, so no surprises there. Ethereum might in fact climb a bit higher, but do not forget to hedge against an unexpected breakdown, which can always happen on the market.
