According to the latest data Open interest (OI) in Ethereum futures on Binance has hit a new record high of $12.2 billion. Several factors have contributed to this rise: deep liquidity and a dense order book, low trading and carry costs, efficient margin and funding mechanics, institutional-grade stablecoin liquidity, abundant USDT/USDC on Binance that facilitates trade financing, and rapid capital rotation between spot and derivatives. Together, these conditions enable a comfortable expansion in open interest.
Currently, the increase in Ethereum open interest coincides with the price holding at relatively elevated levels, suggesting the entry of new leveraged positions mostly on the long side. While this reflects traders’ confidence in the ongoing uptrend, it also heightens the market’s sensitivity to negative news or liquidity shocks. Greater leverage can trigger a rapid wave of liquidations if the price starts to fall. If funding stays moderate, the price could continue to grind higher; however, if funding rises or signs of exhaustion appear, a sharp corrective move driven by long pressure becomes more likely.
With ETH’s open interest at record highs, price action is increasingly leverage-sensitive. As long as spot-led demand absorbs dips and funding stays contained (roughly ≤0.03–0.08% per 8h) with a non-excessive quarterly basis (<~20–25% annualized), the path of least resistance remains higher. A regime shift would be flagged by a persistent jump in funding, perps leading spot on green candles, crowding in USDⓈ-M versus COIN-M, and liquidation clusters forming just below price conditions that raise the odds of a long squeeze and sharp mean reversion. Conversely, a pullback that bleeds OI while funding normalizes would be constructive, likely resetting the trend for a subsequent leg higher.
Written by Arab Chain
