Regarding Ethereum’s futures market, open interest has increased by more than 12%, reaching $20.8B, the highest point in history pointing to the growing sentiment. This came alongside a 7% increase in the price of Ethereum in the last 24 hours to $3,365.
As pointed out by blockchain analytics firm CryptoQuant, tokens such as Bitcoin and Ethereum show that futures open interest has increased, and there is an evident overpowering bullish trend in the market. Open interest, which represents the total outstanding number of contracts in the derivatives market, has also surged to record levels, indicating increased participation in Ethereum’s derivative markets.
It is also catapulted by the exponential increase in Ethereum’s OI-weighted futures funding rate, which is the fee for carrying long futures with leverage. The funding rate has recently attained 0.0374%, thus increasing optimism about higher price moves. CryptoQuant said in the report: “This suggests short-term positive sentiment for higher prices.”
Ethereum’s Derivatives Market Sees Record Growth Amid Rising Leverage and Trading Volume
Ethereum’s derivatives market continues to grow with open interest, increasing by more than 40% in the last four months. Total listings in the market reached $20+ billion for the first time, a level last seen in May at $17 billion. ‘Funding rates indicate whether a market is bullish or bearish, and positive funding rates are an absolute mark in the familiarity of long Ethereum’.
Other measures, including the leverage ratio, which compares open interest to exchange reserves, have risen to a record high of 0.40. This means traders increase variability, over-leveraging their positions to increase returns when everything goes as planned. However, CryptoQuant explained that high leverage levels and long position dominance may result in a long squeeze in the case of a price drop.
Not only this, but the Ethereum on-chain trading volume also increased in November, increasing by 85% within a mere two weeks of trading. The average daily turnover rose from $3.84 billion in November to $7.13 billion in mid-November, the highest rate since the slow trading experienced early in this year.
This rise in the price of Ethereum is also parallel with the trend in the entire domain of cryptocurrencies. Over recent times, Bitcoin touched an all-time high of $99,000, contributing to the development of more altcoins, such as Cardano and Solana, than ever before. Cardano rose 46% in the past week, while Solana’s value surged 22%.
Institutional investors are driving the bulls as the number of investors interested in crypto expands. Nevertheless, Ethereum has continued to perform well, enhancing competition with other blockchain ecosystems, including Solana. Meme coins have flooded the cryptocurrency market again, and Solana-based DApps have recorded higher fees and revenues.
Institutional interest in Solana’s ecosystem is still high: As of Q3 2024, Solana DApps attracted $173 million across 29 funding rounds, up 54% from the previous quarter. This resurgence has shown that Solana is gradually becoming relevant as one of the best systems for decentralized financing.
Watching the milestone in Ethereum’s futures market, it is evident that various cryptocurrencies are experiencing shifts in trader and investor attention and behaviour. Now that Ethereum’s price has started soaring, everybody will watch its derivatives market and its capability to compete with new entrants.
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