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Ethereum’s futures open interest surged to an all-time high of $16 billion during the recent crypto market rally. This increase occurred as the leading altcoin attempted to reclaim the $4,000 price level and approach its all-time high of $4,891 recorded three years ago.
What Is Happening on the Ethereum Front?
As of the time of writing, Ethereum’s futures open interest was $16 billion. The recent uptrend began on May 19 and has increased by 45% since then. Ethereum’s futures open interest measures the total number of futures contracts that are yet to be settled or closed. This increase indicates that market participants are entering new positions. Year-to-date, Ethereum’s open interest has increased by 69%.
Additionally, the increase in Ethereum’s futures open interest is accompanied by a positive funding rate. As of the time of writing, the funding rate was 0.014%. The funding rate is a periodic payment made to ensure that the contract price of an asset in the futures market remains close to the spot price.
When the funding rate is positive, investors with long positions pay those with short positions. This typically occurs when the futures price is higher than the spot price, indicating that buying demand is higher than selling.
The combination of increasing open interest and a positive funding rate for Ethereum suggests significant bullish activity in the cryptocurrency’s futures market. This means that the number of market participants opening new positions and holding the altcoin with bullish expectations is increasing.
Ethereum Chart Analysis
Confirming the ongoing bullish trend, Ethereum’s Relative Strength Index (RSI) was in an uptrend at the time of writing. With a value of 71.21, the momentum indicator signaled that market participants preferred to accumulate more Ethereum rather than sell their crypto assets.
Additionally, the Chaikin Money Flow (CMF), which tracks the liquidity flow into and out of the Ethereum market, stood above the zero line at 0.22. A CMF above zero indicates market strength and high capital inflow. If new money continues to flow into the Ethereum market, the cryptocurrency could surpass the $3,790 level and trade at $3,838.
