A recent analysis by a knowledgeable CryptoQuant expert revealed that Ethereum has undergone a significant transformation in its market dynamics during recent trading sessions.
This rally comes as a relief following Ethereum’s drastic 18% decline in the past week, marking its most substantial weekly drop since March. The drop was inst by majorulators prioritizing profits over potential losses after the Open Interest (OI) decreased from $13 billion to $11.5 billion.
For those unfamiliar with the concept, Open Interest () measures the total number of derivative contracts that remain unsettled. An increase in O indicates an influx of open funds into the market, fostering optimism for heightened trading activity and increased volatility.
Historical Highs and Market Cooling
the rollercoaster bull run of 2021, Ethereum’s OI fluctuated from $9.5 billion before reaching an impressive peak alongside an all-time high price of $4,891 per asset. this price pinnacle hasn’t been revisited during the current bullish cycle, OI surged to reach an all-time high of $13 billion.
This surge indicated an overb market vulnerable to pressure amidst leveraged longs’ accumulation frenzy. As anticipated, outstanding OI resulted in unprecedented volatility as Ethereum encountered a significant wave of liquidations around 5th market leverage became excessively high.
Within just one week, approximately $ million worth of Ethereum positions were liquidated; with large long positions suffering losses exceeding $285 million shorts more than $113 million—a swift adjustment leading to a reduction in OI by over $1.5 billion within a week.
Market Rebound and Future Prospects
Despite events, Ether displays signs of recovery and resilience—experiencing a .5% uptick over the last 24 hours—prompting speculation that it potentially temporarily.
PRICES: Ethereum is rebounding at $3,585 after stability above both psychological and technical levels at or above $3,500—an important resurgence last’s broader decline by 2.5%.
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