Ethereum (ETH) has witnessed a significant increase in derivative market activity, with open positions reaching multi-week highs, according to CryptoQuant data. This surge began following a fake announcement from a purported SEC account approving a Bitcoin-based ETF, which sparked market excitement. As of the time of writing, ETH’s open interest across exchanges was $6.4 billion, marking a 15% increase since the false announcement on January 9th.
The rise in open positions indicates heightened activity in the derivative market, which could be due to more investors entering or exiting positions, hedging, or speculating on price movements. If the increase in open interest leads to a price rise, it suggests new money entering the market, potentially pushing prices higher. CoinMarketCap data confirms a double-digit percentage increase in ETH’s value since January 9th.
An assessment of the funding rates in derivative crypto exchanges confirms this upward trend. ETH’s funding rates have been positive since the recovery in open positions, indicating that the majority of the trading positions opened since January 9th anticipate a continuation of the price increase.
With the rise in ETH’s price, numerous short positions have been liquidated. Data from Coinglass shows that on January 10th, $61.33 million in short positions were wiped out compared to $28.03 million in long liquidations. The same day, SEC Chairman Gary Gensler confirmed the approval of all 11 spot Bitcoin ETF applications, leading to a surge in ETH trading activity over the last 24 hours, with an 80% increase in trading volume and a 10% increase in price, according to CoinMarketCap.
ETH’s 12-hour chart analysis confirms the uptick in crypto accumulation, with key momentum indicators reaching overbought levels. At the time of writing, the token’s Relative Strength Index (RSI) was at 73.64, and the Money Flow Index (MFI) at 79.53. However, the price increase has led to a gradual rise in market volatility, as indicated by the widening of the Bollinger Bands on the chart.
