Data shows the Ethereum open interest has seen a sharp rise recently, a sign that short holders may be piling up on the futures market.
Ethereum Open Interest Has Shot Up Recently
As pointed out by an analyst in a CryptoQuant post, the ETH open interest has spiked as the cryptocurrency’s price has been declining, a pattern that has also been seen a few times in the past month.
The “open interest” here is an indicator that keeps track of the total amount of Ethereum futures market contracts that are currently open on all derivative exchanges. This metric naturally counts both long and short contracts.
When the value of this indicator goes up, it means that the futures market users are opening up more positions right now. Usually, whenever more positions appear, more leverage also emerges in the market, which is something that could instigate more volatility in the asset’s price.
On the other hand, the metric’s value decreasing could lead to the cryptocurrency turning more stab
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