ETH futures open interest reached a record of approximately $35.5 billion.
When the price of ETH was near $4,620 on August 12, short positions faced significant pressure with over $66 million liquidated in one day, the second highest this year.
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ETH futures open interest peaked at approximately $35.5 billion according to Glassnode data.
On August 12, over $66 million in short positions were liquidated – the second largest event of the year.
Significant pressure on short sellers as the price of ETH remains high near $4,620.
What is ETH futures open interest and why has it reached a record?
According to Glassnode, the open interest in ETH futures contracts reached approximately $35.5 billion, reflecting the largest number of open positions ever.
Open interest is the total number of futures contracts that have not yet been closed or liquidated, indicating market interest and liquidity. This record level reflects a strong increase in trading activity and expectations for volatility in ETH prices.
This increase may be related to investors actively betting on the price trend of ETH due to macroeconomic factors and positive news from the cryptocurrency market.
Why are short sellers under significant pressure when the price of ETH is near $4,620?
On August 12, the price of ETH remained around $4,620, causing short positions to be liquidated by about $66 million, the second-largest short liquidation event of 2024.
Short positions expect prices to fall, but when prices rise or remain stable at high levels, short sellers are forced to close their positions, leading to liquidity pressure and significant financial risk.
This event indicates a high level of volatility and market sentiment reflected as the price of ETH continues to attract large capital flows in both buy and sell positions.
The record open interest indicates high growth confidence and market expectations for Ethereum.
Cryptocurrency market analyst, August 2024
How does large short liquidation affect the ETH market?
Large-scale short liquidation creates increased volatility in the market, often leading to a short-term price spike due to the buying pressure from whales and investors covering losses.
The liquidation event of $66 million shows significant pressure on individuals betting against the trend, reinforcing the upward momentum and stability of ETH above the $4,600 level.
This also reflects increased caution and enhanced risk management in ETH futures trading strategies.
Frequently Asked Questions
What is open interest in ETH futures contracts?
Open interest is the total number of outstanding futures contracts, reflecting liquidity and market interest in ETH futures.
Why does short liquidation have a significant impact on ETH prices?
Short liquidation creates new buying pressure when positions are forcibly closed, often resulting in sudden price increases and market volatility.
What does record open interest indicate about the ETH market?
This is a sign of active participation from investors and strong growth expectations for Ethereum.
Who are short sellers and how do they operate?
Short sellers bet on ETH prices falling, preselling and buying back later to profit from the price decline.
How can investors manage risk when trading ETH futures?
Investors should use tools such as stop-loss orders, reasonable capital allocation, and continuously update market information.
Source: https://tintucbitcoin.com/ethereum-futures-thiet-lap-ky-luc-open-interest/
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