The Ethereum Merge had brought about a dramatic rise in open interest. Even after the Merge, the open interest has not declined, given all of the new interest from institutional investors following the network’s move to a proof of work mechanism. Ethereum’s open interest is at an important new peak, which indicates a possible rise in price.
Open Interest Reaches $7.7 Billion
Ethereum open interest still remains high despite ETH’s decline to the low $1,000s back in September. Data shows that open interest in Ethereum has reached $7.7Billion in this week despite traders choosing not to trade at the quarter-end closes.
The result is that $7.7billion in futures open interests has been realized, although the vast majority have been biased towards bearish. Given that crypto markets are only one year old, it is not surprising that investors anticipate more bearishness.
The price of Ethereum remains above $1,300| Source: ETHUSD on TradingView.com
The long-awaited Merge upgrade did not trigger a rise in the price for ETH, causing investor sentiment to take a dive. Investors began to take profits in order to avoid more losses and keep an eye on the market. Similar trends can be seen in the futures market.
Ethereum (ETH) to Rally
An open interest ratio is positive for digital assets. It is likely that many traders take increasingly bearish positions regarding Ethereum, meaning there may be an opportunity for a brief squeeze if prices break out.
Given the declines in various areas, the recovery of the crypto market is unlikely to be very rapid. However, if the Fed took note of this advice and stopped raising interest rates for the near term, then macro markets will likely rebound, taking the crypto market with them.
It is likely that the next FOMC meeting will take place in November. This is just over a month away. More interest rate hikes are expected at this moment, which is bad news for crypto-assets including Ethereum.
The bulls’ focus is on getting the price to rise enough to break the $1,500 barrier. ETH will not reach this level anytime soon, as sell pressure is still high.
Featured Image from Crypto News Flash Chart from TradingView.com
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