Crypto: Eth Open Interest Falls To 3-year Low: What Does It Mean For Ether...

Traders say Ether’s declining open interest and futures funding rates could set the groundwork for a significant short squeeze on bearish leveraged positions and a rally to $2,500.

Ether (ETH) traded back above $2,000 on Friday, and its gains extended after the US Consumer Price Index (CPI) print came in cooler than expected.

The recovery put ETH/USD on track for its first bullish weekly candle close since mid-January, fueling speculation for a rally toward $2,500.

Ether futures’ open interest fell by 80 million ETH in 30 days, and funding rates hit three-year lows, indicating a weakening bearish trend.

ETH price has established strong support around $2,000, a level that must hold to secure the recovery.

CryptoQuant data shows Ether futures open interest (OI) across all major exchanges has dropped by over 80 million ETH in the past 30 days.

Binance, the world’s largest cryptocurrency exchange by trading volume, recorded the largest decline of about 40 million ETH (50%) over the last 30 days.

Related: ETH ETF holders in ‘worse position’ than BTC ETF peers as crypto market looks for bottom

Ether’s OI on Gate exchange fell by more than 20 million ETH (25%), while Bybit and OKX saw declines of 8.5 million ETH and 6.8 million ETH, respectively. Cumulatively, the four major platforms saw a total decline of about 75 million ETH, while other platforms accounted for the remaining five million ETH, confirming that the phenomenon is widespread and not limited to a single exchange.

This suggests that leverage traders are “reducing their exposure rather than opening new positions,” CryptoQuant analyst Arab Chain said in a Quicktake analysis.

Source: CoinTelegraph