Data shows the Ethereum Open Interest has been trading at relatively low levels recently. Here’s what this could mean for the asset’s price.
Ethereum Open Interest Has Been Moving Sideways Since Its Plunge
As explained by an analyst in a CryptoQuant Quicktake post, the ETH Open Interest has followed a similar trajectory as the price of the cryptocurrency recently. The “Open Interest” here refers to the total number of derivative-related contracts open for Ethereum on all exchanges.
When the value of this metric goes up, it means that investors are currently opening up new positions on these platforms. Generally, this kind of trend leads to an increase in the market’s total leverage, so the asset price could become more volatile.
On the other hand, a decline in the indicator implies the investors are either closing up their positions of their own volition or getting forcibly liquidated by their platform. Such a drawdown may accompany violent price action, but once
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