Ethereum Takes Bullish Price Action, $6.5 Bn Open Interest Future Sets Record

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ethereum
ethereum

As Ether’s price rallied up to $1,750 setting another new all-time high, the open interest future for Ethereum reached $6.5 Billion. The open interest future of the world’s second-largest cryptocurrency has set now a record with an estimated value of $6.5 billion.

Within only five days, ETH price soared by 33%. Analysts assume the reason behind the remarkable growth is investors’ excessive usage of leverage. It means that traders are using the investment strategy of leverage to increase the ETH value.

Probable Reasons Behind The Ethereum Upsurge

Analysts inform that Ether’s price surge is going on for a longer period than expected. ETH crossed the support level of $1500 in February and went through a great deal of growth to reach its new all-time high.

The question arises whether the cryptocurrency market is showing exceeding optimism about ETH or not.

Key metrics show that while the open interest future or the lending rate should move between 6% and 20% as an annual premium, investors are delaying settlements and demanding a greater price.

Recent data on Ethereum shows that a future premium that is more than 20% hints at investors’ leverage. It is also paving a way for liquidation overflow that may lead to a market crash.

Though analysts inform that future premium over 20% may not be very alarming but it definitely indicates excessive usage of leverage from traders’ side. The over-optimism may bring risks for the market if the price dips below the level of $1,450.

Investors using the strategy of leverage to pump the value is certainly showing increasing popularity for Ethereum. While it implies a positive bullish price rally for the cryptocurrency, experts keep their eyes fixed on the surging open interest future premium.