Ethereum faces rising selling pressure with increased exchange inflows.
Declining Open Interest signals reduced liquidity and potential price challenges.
Ethereum’s price has surged 1.44% over the past 24 hours, trading at $4,018, with trading volume spiking by 40% during the same period. The altcoin has gained 29% over the past month and 67.30% year-to-date in 2024. However, recent developments suggest Ethereum’s bullish momentum could face challenges.
ETH Price Chart, Source: Sanbase
One critical metric influencing ETH’s rally this year has been its Open Interest (OI), which represents the total value of open contracts in the derivatives market. When OI increases, it signals heightened liquidity and buying pressure, often leading to higher prices. Conversely, a drop in OI indicates selling pressure as traders close positions and withdraw liquidity. Data from Santiment reveals Ethereum’s OI peaked at $14.50 billion on December 15 but has since declined to $13.94
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