Ethereum's open interest on Binance reached 10 billion USD, with ETH prices soaring close to the ATH of 2021.
The network upgrade reduces L2 transaction fees by 90%, while 30% of the ETH supply is locked in staking. Institutional capital is flowing in and whales continue to buy, supporting the price increase.
MAIN CONTENT
ETH open interest on Binance increased by 46% in 30 days to reach 10 billion USD.
ETH price hit 4,300 USD, approaching the all-time high of 4,867 USD in 2021.
L2 transaction fees decreased by 90%, 30% of ETH locked in staking, institutional capital and whales continue to buy.
How has Ethereum's open interest on Binance changed in the past 30 days?
According to analysis by crypto expert oinonen_t from CryptoQuant, Ethereum's open interest on Binance has risen to 10 billion USD, equivalent to a 46% increase compared to 30 days ago.
This figure indicates a significant increase in trading activity of ETH futures and options, signaling that investors are betting more on Ethereum's price volatility.
The increase in open interest represents significant market interest and the potential for strong price fluctuations in the short term.
What does the current ETH price compared to its historical peak mean?
The current ETH price is around 4,300 USD, just shy of the all-time high of 4,867 USD in 2021.
The approach to ATH reflects an optimistic market sentiment along with supportive factors from technology and new capital inflows. This is a positive sign for long-term investors and whales.
If this trend continues, ETH could establish new high prices while solidifying its position in the cryptocurrency market as the leading digital asset.
How do network upgrades and staking affect the ETH market?
Network upgrades have reduced transaction fees by 90% on Layer 2, optimizing user experience and enhancing scalability for the Ethereum ecosystem.
In addition, about 30% of the ETH supply is locked in staking, indicating the community's commitment to long-term holding and reducing selling pressure in the market.
These improvements not only boost liquidity and performance but also create a solid foundation for the stability and growth of ETH value.
'Open interest rising sharply on Binance indicates long-term investment demand and begins to create opportunities for a new price explosion for Ethereum.'
Analyst oinonen_t, CryptoQuant, 12/08/2024
How do institutional capital and whales impact the ETH market?
Spot ETF trading volume has surpassed 117 billion USD, indicating large institutional capital is flowing into the ETH market.
Whales continue to increase their buying positions, partly due to a positive perception of price prospects as well as network upgrades that reduce transaction costs.
This phenomenon could trigger 'short-covering', meaning that investors betting against will have to buy back ETH, thus creating a strong upward price momentum.
What opportunities are there for investors as the ETH market improves sentiment?
If the market maintains a positive momentum and investor sentiment supports it, the likelihood of a new bullish wave for ETH is very high.
Long-term ETH holders or technically savvy traders can take advantage of this opportunity with reasonable risk management strategies and closely monitor on-chain indicators.
This short-term trend could generate attractive profit levels amid strong liquidity and capital inflows.
Frequently Asked Questions
What is open interest and what does it reflect about ETH prices?
Open interest is the total number of open contracts that have not been closed; an increase indicates active trading, reflecting expectations for strong price volatility in the future.
How does the reduction in transaction fees on Layer 2 affect ETH?
A 90% reduction in fees enhances user experience, attracting new users and trading, increasing the value and appeal of ETH.
Why is 30% of the ETH supply locked in staking important?
Locking ETH in staking reduces the circulating supply of ETH, limits sell-offs, and creates a lack of supply pressure, supporting long-term price increases.
How does institutional capital affect the cryptocurrency market?
Institutional capital provides large and stable liquidity, facilitating the development of a professional market and reducing extreme volatility.
What is short-covering and how does it impact ETH prices?
Short-covering is the buying back of borrowed assets to close short positions, often creating significant buying pressure, rapidly pushing prices up in the market.
Source: https://tintucbitcoin.com/ethereum-binance-open-interest-dat-10-ty-usd/
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