Ethereum's Open Interest Increased by 18%: Sign of a Bull Trap?

Ethereum's futures trading has witnessed a significant uptick as the price of ETH has risen, with open interest climbing by over 18%.

Key Takeaways

Ethereum's open interest surged by 18.4%, leading the growth among major cryptocurrencies.
The overall open interest in ETH futures increased by 19.15%, reaching $33.37 billion.
Total open interest across all cryptocurrencies grew by 9.43% in the past 24 hours to $113.78 billion.
Increased demand for bullish leveraged plays is indicated by positive perpetual funding rates and cumulative volume deltas.
Despite market recovery, puts on Ethereum are trading at higher prices than calls, suggesting traders are still hedging against downturns.
Ethereum's price rallied for seven consecutive days, reaching $2,299 with potential targets of $2,600 and $2,800.
A drop below $2,036 could lead Ethereum into sideways trading between $1,750 and $2,200.

Ethereum's Open Interest Increased by 18%: Sign of a Bull Trap?

Main Content

Recently, Ethereum's open interest saw a remarkable rise, spearheading growth among major cryptocurrencies. According to analyst Maartunn, the open interest has increased by 18.4%.

As reported on CoinGlass, the open interest for ETH futures rose by 19.15%, bringing the total to $33.37 billion. Furthermore, the open interest for all cryptocurrencies increased by 9.43% over the last 24 hours, reaching $113.78 billion. This points to a rise in market risk-taking.

The growth in open interest across major cryptocurrencies is coupled with encouraging perpetual funding rates and positive volume deltas, suggesting a rising demand for bullish leveraged positions. However, on the Deribit exchange, puts linked to Ethereum are currently more expensive than calls at all time frames. This behavior might indicate that traders are still looking for ways to protect themselves against possible downturns, despite the market's recovery.

Ethereum has experienced a price increase over the past week, with gains recorded for seven consecutive days since March 9. If today concludes positively, this will mark the eighth day of upward movement. At present, ETH has risen by 7% in the last 24 hours, trading at $2,299, as the broader market shows improvements, with various altcoins outperforming Bitcoin and some registering double-digit gains.

Behind this market recovery is a short squeeze, according to CoinGlass data, which indicates that $398 million in total liquidations occurred in the last 24 hours, affecting 96,385 traders. Notably, short liquidations constituted the major portion, amounting to $320 million, with Ethereum shorts suffering the most at $141 million.

If buyers manage to keep the ETH price above $2,036, there is a heightened likelihood of a rise toward $2,600. Ethereum bulls are primarily aiming for $2,800 as their next benchmark. However, futures data for ETH reveals a divided sentiment in the market, indicating limited chances for a prolonged rally of 33%. Should the price dip from current levels, Ethereum may hover in a sideways range between $1,750 and $2,200 for some time.