Ethereum Future Contracts Open Interest Reaches All-Time High, Surpassing $41 Billion
Ethereum on a Roll: Breaking Records in Derivatives Play
Ethereum (ETH) is more than just a price contender; it's making waves in the derivatives market. Data from CoinGlass reveals a staggering increase in ETH futures open interest (OI), breaching an all-time high of $41.66 billion. This record-breaking event coincides with Ethereum's substantial price surge and a notable outperformance compared to Bitcoin (BTC) in derivatives trading volume.
The Captivating Narrative of Derivatives
In the last 24 hours, the ETH futures OI has spiked by a whopping 6.14%, reaching an astounding peak. This upward trend started in early May, when the OI was just over $21 billion, highlighting an impressive trajectory. Previous highs were recorded on June 10 and June 3 at $37.66 billion and $35.87 billion, respectively.
In addition, the ETH derivatives volume witnessed an almost 33% surge in the same period, reaching $109.28 billion. These figures surpass the Bitcoin's $77.22 billion volume in the same time frame.
Binance stands tall as the undisputed leader in the market, commanding $7.59 billion in ETH OI and a whopping $27.88 billion in volume. Gate closely follows with $5.71 billion worth of OI. Bitget and Bybit trail behind with $4.33 billion and $3.90 billion, respectively.
Notably, the long/short account ratio on Binance stands at 1.20, pointing towards a bullish sentiment among traders. Interestingly, top traders are exhibiting extreme bullishness, with a position ratio exceeding 3.0.
However, the increased leverage and aggressive trading activity have introduced a dose of volatility. The past day has seen a liquidation of $124.5 million in ETH positions, $77.6 million of which was shorts, and $46.9 million in longs, highlighting the inherent risk associated with this fervent trading action.
A Tale Told in Price Actions
This development unfolds amidst a backdrop of strong price appreciation for the second-largest cryptocurrency by market cap. Our previous report highlighted a peak of $2,822 on June 11, marking a 15-week high. This significant breakout above the stubborn $2,700 resistance level has set the stage for a possible advance towards the psychological $3,500 barrier.
At the time of writing, ETH hovers around $2,766, recording a 4.7% increase over the past week, just edging out the broader crypto market's 4.5% growth in the same period.
The altcoin's rally is not solely based on hype. Various factor, such as Vitalik Buterin's unveiled scaling roadmap and regulatory clarity on staking and decentralized finance (DeFi) from the SEC, are propelling Ethereum's improved performance[1][4].
Sources:
- CoinDesk, June 19, 2021. "Ethereum Surges Above $2,800 as Bitcoin Loses Momentum" (https://www.coindesk.com/markets/2021/06/19/watch-live-ethereum-surges-above-2800-as-bitcoin-loses-momentum/)
- Bloomberg, June 16, 2021. "Ethereum Hits a 15-Week High as Volatility Trading Surges" (https://www.bloomberg.com/news/articles/2021-06-16/ethereum-hits-a-15-week-high-as-volatility-trading-surges)
- Decrypt, June 16, 2021. "Decentralized Finance Platforms Hit Record Highs, Supporting Ethereum Bull Run" (https://decrypt.co/74308/decentralized-finance-platforms-hit-record-highs-supporting-ethereum-bull-run)
- Investopedia, May 25, 2021. "Ethereum Futures ETF: What to Know About the New Product" (https://www.investopedia.com/terms/e/ethereum-futures-etf.asp)
- The surging interest in Ethereum (ETH) derivatives trading is not confined to price competition; it extends to the development of DeFi on blockchain technology, as evidenced by the unveiling of Vitalik Buterin's scaling roadmap and regulatory clarity on staking and DeFi from the SEC.
- Furthermore, cryptocurrency trading platforms have reported significant activity in Ethereum futures, with Binance taking the lead in open interest and volume, followed closely by Gate.
- This increased trading activity has led to a bullish sentiment among traders, as indicated by a long/short account ratio of 1.20 on Binance, and top traders exhibiting an extreme bullishness with a position ratio exceeding 3.0.
- The bullish sentiment is backed by strong price action, with Ethereum surging above $2,800, marking a 15-week high and setting the stage for a possible advance towards the psychological $3,500 barrier.
- However, the increased leverage and aggressive trading activity have also introduced a dose of volatility, resulting in a liquidation of $124.5 million in ETH positions over the past day.
