The 2021 alternate season may have started with Ethereum’s top OI. Currently, open interest in Ethereum is over $ 3.5 billion. Rarely does an uptrend emerge so clearly in Ethereum. But Bitcoin’s price rally supported the trend. Over the past weekend, the OI broke all records and gained 30% from the December level. Major spot exchanges like Binance and OKEx paved the way for this record high in Ethereum futures. Binance had the highest share of open interest, nearly 23%.
Source: The block
The IM goes from less than $ 2 billion to almost $ 2.6 billion. This increase represents the top 10 trades, as shown in the chart above. Almost 99% of Ethereum addresses are currently profitable and Ethereum is still exiting spot trading. The narrative of scarcity leading to the higher price accumulates. What happens next will explain what happens when there is no reason for retail traders to sell.
Etherum reserves are falling
In the past 24 hours, Ethereum’s reserves have fallen nearly 54%, based on data from Chainalysis. In the midst of the price rally, there is still hope that the price will discover a new ATH. Indeed, the trade intensity is relatively low. Trade intensity may increase as the volume and size of transactions increase. This can further increase volatility. Trading volume is close to half of the previous bull run, however, as prices rise. It could increase considerably.
Source: The block
Ethereum’s price chart and volume suggest that although they may have triggered the price rally. Current forecasts from on-chain analysts may still be conservative and could still rally. Ethereum’s rapid rise in OI is not entirely due to institutional investors and whales. Interestingly, there is a relatively high percentage of retail traders behind the rise in Ethereum and OI prices. For OI to translate into trading volume, Ethereum’s supply must continue to decline. The volume of transactions on the spot exchanges must increase. This can create a propitious setup for a near term top and increase the price of Ethereum.
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