Ethereum open interest for perpetual futures contracts on Deribit, a crypto derivatives exchange, is at a three-year high, Glassnode data on May 30 reveals.
Perpetual futures are a kind of derivative that tracks the performance of an underlying asset, in this case, Ethereum, allowing traders to not only “buy” but also short-using leverage. These financial derivatives allow investors to gain exposure to the underlying without buying or selling it directly.
Ethereum Open Interest On Deribit At A Three-Year High
At $544 million, there are now more open Ethereum perpetual positions, long and short, on Deribit than in the last three years. The expansion in open positions now surpasses $542 million, recorded on April 20, 2023.
Open interest tracks the total number of open positions recorded in a trading platform. These positions or contracts have not been settled, meaning traders have left them open, expecting the price to move in or against their order.
Often, the size of open interest in any crypto derivatives exchange can be used as a sentiment indicator, showing the level of interest in a particular asset.
For instance, increasing open interest in a market that has not been impacted by a turbulent event, such as unfavorable regulations, hacks, or blockchain failures, may indicate bullish sentiment. In that case, traders are opening more long positions, expecting price gains.
While Ethereum’s open interest in Deribit is at a three-year high, the cumulative open interest contracts across all derivatives exchanges, like Binance, Bybit, and OKX, remain within range.
According to Coinalyze data on May
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Author: Dalmas Ngetich
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