Ethereum is now in a correction phase after reaching a high of about $4,950 in late August, with open interest (OI) dropping more than 8% in the past week.
On the other hand, Binance’s futures market data suggests that the dip may be close to running out of steam, which could set the stage for the next rally.
Reading the Futures Market Tea Leaves
According to analysis shared by crypto researcher Burak Kesmeci, local bottoms for Ethereum have frequently been preceded by drops in Binance’s open interest. Over the last three months, an average OI drop of 14.9% on the hourly timeframe has corresponded with spot price corrections averaging 10.7%.
“Drops in OI have signaled spot price corrections ahead of time,” wrote the analyst.
He provided three precise examples: a 10.52% OI fall from 11.4 billion to 10.2 billion on August 17, a 25.38% crash from 13 billion to 9.7 billion on August 20, and an 8.69% decrease from 11.39 billion to 10.4 billion on September 13.
In each case, the re
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