Ether’s (ETH) price surged to $4,000 on March 23, briefly surpassing $3,890 before correcting due to $46.58 million in leveraged long liquidations. This rally led to Ethereum futures open interest reaching an all-time high of $17.09 billion on May 28. Despite consolidating above $3,700, Ethereum futures open interest remains high at $16.1 billion, according to Coinglass data. The monthly trading volumes of Chicago Mercantile Exchange (CME) options on Ether futures also hit an all-time high in May, rising by 115% to $931 million.
Some analysts believe that the increasing trading activity in Ether’s derivatives market signals increased institutional interest in ETH following the approval of spot Ethereum ETF’s on May 23. Wintermute analysts noted that Ether’s CME open interest is approaching all-time highs, indicating institutional interest in the ETH/BTC trade. The rise in Ether’s options suggests a rise in implied volatility, indicating expectations for significant price movements as the launch of spot Ethereum ETFs approaches.
Perpetual contracts (inverse swaps) in the derivatives market also show a bullish bias, with Coinglass data indicating an increase in ETH funding rates to 0.0175. This rate, equivalent to 0.367% per week, typically remains positive in situations driven by increasing optimism. Traders using perpetual contracts are exhibiting the same bullishness observed in the futures markets. At the time of publication, Ethereum’s price was at $3,843, up 1.2% over the last 24 hours, according to CoinGecko data.
Overall, the rise in institutional interest in Ether’s derivatives market following the approval of spot Ethereum ETFs indicates a growing confidence in the asset among investors. The increase in trading activity in Ether’s futures and options markets suggests a positive outlook for the cryptocurrency, with implied volatility on the rise as market participants anticipate significant price movements. As Ether’s price continues to show bullish momentum in both futures and perpetual contracts, investors should conduct their own research before making any investment decisions.
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