Subscribe to Bankless or sign in
Ethereum’s futures open interest across all exchanges has surged over 12% to a record $20.8 billion, reflecting bullish sentiment in the derivatives market.
What’s the scoop?
- Bullish Action: Positive funding rates, currently at 0.0374%, highlight a market skewed toward long positions, with traders betting on rising ETH prices.
- More Leverage: The estimated leverage ratio, which measures open interest divided by exchange reserves, has hit a record 0.40, signaling increased risk-taking as traders amplify returns through leverage.
- On the Rise: Ethereum’s open interest has grown 40% in the past four months, surpassing its previous high of $17 billion in May 2024.
Bankless take
Ethereum's derivatives market is booming, but the high leverage and dominance of long positions raises the risk of a long squeeze. While optimism is high, traders should be cautious of sudden volatility that could trigger a cascade of liquidations and a market correction.
2
0
