Ethereum’s derivatives market reached a historic milestone as futures open interest surged to an all-time high of $20.8 billion on Friday, signaling robust bullish momentum. This 12% increase in open interest coincided with a 7% rise in Ethereum’s price, which climbed to $3,365, according to The Block’s data.
Open interest, a key metric that tracks the total number of outstanding futures contracts, reflects heightened optimism among traders. According to a CryptoQuant report, the open interest-weighted funding rate has spiked to record positive levels, hitting 0.0374% as per Coinglass data. This indicates a prevailing dominance of long-position traders, who are betting on continued price increases.
Ethereum’s derivatives market has grown significantly, with open interest expanding by over 40% in the last four months. This surpasses the previous high of $17 billion set in May. A CryptoQuant analyst highlighted this trend, stating, “Ethereum’s derivatives market activity reflects growing investor engagement, with futures open interest recently crossing $20 billion for the first time.”
Positive funding rates further underscore the market’s bullish sentiment, while the estimated leverage ratio—a measure of open interest relative to exchange reserves—has reached a new peak of 0.40. This suggests traders are increasingly utilizing higher leverage to amplify potential returns.
Despite the optimism, the CryptoQuant report cautions against potential risks. Elevated leverage and a dominance of long positions raise the likelihood of a long squeeze, where sudden price drops could trigger widespread liquidations, leading to market corrections.
As Ethereum’s price action and derivatives market activity continue to draw investor attention, traders are watching closely for further indications of sustained bullish momentum—or potential volatility ahead.