For a long time, Ethereum outperformed bitcoin. Although it’s more than five years old, the altcoin managed to outperform bitcoin in terms of market cap. The bull market, and even the bear markets saw this outperformance continue. Ethereum went one further and overtook bitcoin in another measure, the open interest.
Bitcoin Open Interest Flips
Glassnode released new data that showed an interesting developmentOpen interest is shown in Ethereum and Bitcoin options. This metric was naturally won by Bitcoin because it is the first cryptocurrency on the market and also has the highest interest among institutional investors.
This was quickly achieved by Ethereum, which had surpassed bitcoin’s open interest to the tune of $5.6 billion in all put and call options. It accounted for more than 47% growth in just one month. ETH’s popularity during this time and price recovery has obviously helped in its domination.
Bitcoin on the other side continues to trend at normal levels, with $4.3 Billion in open interest. Ethereum is now ahead of more than 30. Ethereum investors have shown their support by investing in call options worth more than $2.6 million and calling ratios of 0.26. This is very bullish.
Ethereum Merge Drives Interest
Merge was the main reason for the rise in ETH prices. Ethereum developers moved ahead to give an estimated date after there was uncertainty about when the Merge would take place or if it would be delayed.
The price of Ethereum falls to $1,600| Source: ETHUSD on TradingView.com
Investors had already begun increasing their holdings prior to the Merge with the announcement of September 19th. The Merge is getting closer with each new month. This has led to a rise in positive sentiment about the digital asset. It is clear that investors are feeling positive about the Merge, as it represents one of the most significant updates to crypto history.
The Merge is also behind the growth of Ethereum’s open interest. Bullish sentiment has been generated by the imminent upgrade. It is worth noting that all staked ETH would be free to withdraw under the Merge. The market will be flooded with ETH, which could cause a price drop. By that point, it’ll not be important how bullish the sentiment is but if there is enough demand to soak up this new supply.
This raises the question of whether this would be another “buy the rumor, sell the news” event. One thing is certain, ETH users need to be prepared for a bear market if this happens.
Featured Image from Coingape. Chart by TradingView.com
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