ETH Open Interest Shatters Records - Is This The Rocket Fuel For The Next Leg Up?

Ethereum's derivatives market just hit unprecedented levels as open interest surges to all-time highs.

The Leverage Floodgates Open

Traders are piling into ETH positions like never before, pushing open interest into uncharted territory. This massive influx of capital suggests institutional and retail investors are positioning for significant movement.

Bullish Signals Everywhere

Elevated open interest typically precedes major price breakouts when combined with rising spot prices. The market's betting big on ETH's next move upward—because nothing says 'sound investment' like everyone leveraging themselves to the eyeballs simultaneously.

History shows that when open interest hits these extremes, it either fuels explosive rallies or creates spectacular liquidations. With ETH's fundamentals stronger than ever and the entire crypto space watching, the smart money says this momentum could push prices significantly higher. Just remember—in crypto, 'everyone's right' until suddenly they're all very, very wrong.

BTC-ETH Open Interest is Very Close

Glassnode released its weekly report, “A Derivatives-Led Market,” on Wednesday. It explained that while Bitcoin’s price recently hit a new all-time high before correcting, the crypto derivatives market primarily drove the market’s direction.

Despite the correction, Glassnode pointed out that market participants still consider this a bull market, which is reflected in the rising open interest dominance of ETH, a key “bellweather asset“

As of Thursday morning UTC, the spot dominance gap between Bitcoin (59.42%) and Ethereum (13.62%) is about fourfold. However, the open interest dominance is much closer, with Bitcoin at 56.7% and Ethereum at 43.3%. This suggests that Leveraged investors are showing significantly greater interest in ETH.

This trend is even more pronounced in trading volume. Ethereum’s perpetual futures trading volume share has reached an all-time high of 67%.

Glassnode explained that these figures highlight the high level of investor interest in the altcoin sector and indicate that investors are now willing to take on greater investment risk.

So, could the price of ETH rise further and serve as a stepping stone to an “altcoin season”? Ultimately, the key appears to lie in the attitudes and interest rate decisions of the US Federal Reserve (Fed) officials.

One of the main reasons for the recent crypto price correction is the uncertainty surrounding the Fed’s interest rate cuts due to renewed US inflation. If Fed Chair Jerome Powell’s speech at the Jackson Hole meeting on Friday signals a MOVE toward interest rate cuts, ETH is expected to rise much faster than BTC.