Traders have been jumping in and out of Ethereum (CRYPTO: ETH) trades over the last month as the Merge to Proof-of-Stake approaches.
What Happened: Open interest in ETH dropped sharply over the weekend as the asset’s price fell to a low of $1,535, noted analysts in Kaiko’s weekly crypto market overview report.
See Also: $600M Liquidated In Crypto: Bitcoin (BTC), Ethereum (ETH) And Dogecoin (DOGE) Longs See Max Pain
“Open Interest denominated in ETH reached its lowest levels this month as ETH’s price crashed below $1,600 and open positions in the futures market were liquidated,” wrote the analysts.
However, they noted that open interest made a recovery from under $2.6 million on Sunday to above $2.8 million on Monday morning.
“As the price dipped below $1,600, we observed a significant spike in open interest this morning as new money came flooding into the futures market for ETH,” they said.
Funding rates can help assess which direction the majority of market participants are betting on. If funding rates are positive, it usually implies that traders are bullish because long positions are willing to pay short positions.
“When combined with the spike in open interest we observed this morning, it seems these new positions in ETH futures are biased long and investors are bullish at these price levels,” stated Kaiko analysts in the report.
See Also: ETHEREUM (ETH) PRICE PREDICTION
Price Action: At press time, ETH was trading at $1,593, down 1.97% over the last 24 hours as per data from Benzinga Pro.
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