Ethereum’s futures open interest has soared to an unprecedented $16 billion, marking a significant milestone during the recent cryptocurrency market surge. This spike reflects Ethereum’s attempt to reclaim the $4,000 benchmark and inch closer to its historical peak of $4,891 from three years ago.
What Is Driving Ethereum’s Surge?
As of the latest data, Ethereum’s futures open interest has reached $16 billion, sparked by a 45% rise since May 19. This metric, which measures the total number of unsettled or open futures contracts, signals that more market players are opening new positions. To date, Ethereum’s open interest has seen a 69% increase this year.
Moreover, the surge in open interest is coupled with a positive funding rate, currently at 0.014%. The funding rate, a periodic payment meant to keep the futures price aligned with the spot price, indicates heightened demand for long positions when positive. This typically happens when the futures price exceeds the spot price, suggesting a stronger buying demand.
What Does Positive Funding Rate Indicate?
When the funding rate is positive, long position holders pay those with short positions, reflecting market optimism. This trend signals that bullish sentiment is dominating Ethereum’s futures market, with an increasing number of participants opening new positions and holding bullish expectations for the altcoin.
Market Indicators and Future Predictions
Supporting the bullish outlook, Ethereum’s Relative Strength Index (RSI) was observed in an upward trajectory, standing at 71.21. This momentum indicator suggests that traders are favoring accumulation over selling. Concurrently, the Chaikin Money Flow (CMF), which measures capital movement in and out of the market, was above zero at 0.22. This positive CMF value indicates strong market confidence and substantial capital inflow.
Should this influx of new money persist, Ethereum could break past the $3,790 barrier and potentially trade at around $3,838, signifying continued bullish momentum in the crypto market.