This is historic. The open interest in Ethereum is higher than that in Bitcoin for the first time ever in the history of digital assets. Something that genuinely appears to be a result of The Merge’s upgrade to the Ethereum blockchain.
The open interest in Ethereum is soaring!
The Ethereum open interest figures on the Deribit exchange surpassed those of Bitcoin on all exchanges, according to a report published yesterday by the Glassnode platform. Ethereum is valued at 5.6 billion dollars, compared to 4.3 billion for Bitcoin.
Open interest on ETH even reached $7 billion earlier in the weekend. Additionally, it appears that hedge funds are focusing on the king of cryptocurrencies. The Block data indicates that on July 30, there was 7.58 billion in total open interest for Ethereum options. This identical indicator showed $2.74 billion at the start of the month. In just 30 days, there has been an increase of more than 175 percent.
Eagerly anticipating The Merge!
The Ethereum blockchain update is the reason why, for the first time in history, open interest in Ethereum is greater than that of Bitcoin. There are factors at play right now that lead some analysts to predict that Ethereum may eventually surpass Bitcoin.
Investors appear to be placing their bets on a successful transition from Proof of Work to Proof of Stake, even though this change is predicted to save the Ethereum blockchain more than 99 percent of its resources.
Not to mention that Ethereum is predicted to experience deflation after the move. An important factor in a situation where inflation, whether in Europe or on the other side of the Atlantic, dangerously approaches 10%. The most recent information indicates that the move will occur on September 19.
Using open interest as a gauge of market sentiment
There are a variety of tools available in the trading sector. If we frequently use the technical analysis indicators, specific information, like open interest data, is essential to comprehending a market.
The value of all active contracts on an asset that have not yet been settled is what is meant specifically by “open interest.” In other words, open interest describes the amount of contracts that are still in waiting situations and are held by market participants or investors. So, we can see how this tool could be able to provide some light on market mood. nonetheless, on the factors that influence prices as well.
3,000 dollars for ethereum in December 2022?
The price of ETH may change significantly if institutional supporters of Ethereum 2.0 start to emerge. According to Joshua Lim, Genesis Global Trading’s Head of Derivatives,
- A more recent phenomenon has been the popularity of low-premium ETH option structures from macro-discretionary hedge funds positioning themselves for the merger. A common pattern could be a buy butterfly which pays out if ETH/USD ends in December 2022 around the spot price of $3000. These longer-maturity, tiered structures inflate open interest in ETH options.
In other case, if Ethereum starts to appreciate once more, the entire crypto market may decline along with it. Ethereum has recently increased by 90 percent since its low point in June last year. If we look at the past 30 days, the token has increased by 49 percent, outperforming Bitcoin, which has increased by 19 percent. If the numerous prediction algorithms are to be believed, the idea of ETH reaching $3,000 in six months does not seem implausible.
