Ethereum Futures open interest has reached a record $17 billion, with the gains following the approval of spot Ether exchange-traded funds (ETFs) in the US.
The spot price of Ether has yet to post significant gains since the ETF approval. Instead, the unlikely beneficiary has been the Ethereum derivatives market, and the open interest is at an all-time high.
Ethereum Futures Open Interest Hits $17B
At the start of the year, the open interest for Ethereum futures was below $7 billion. The options open interest also hit $6.45 billion. The open interest consolidated at these levels in January and February, with the sentiment only changing in March.
The open interest increased in March as Ether surged past the $4K level. At the time, futures open interest increased to $10.57 billion. While this growth was significant, it only started to become substantial towards the end of April as the crypto market anticipated the approval of spot Ether ETFs.
Data from Coinglass now shows that Ethereum futures open interest is now at a record $17 billion. The Binance exchange has the largest share of the OI volumes at $6.16 billion, followed closely by Bybit at $3.49 billion. OKX has the third-largest share with $2.22 billion.
The data above from Coinglass also shows that the Chicago Mercantile Exchange (CME) accounts for $1.28 billion in Ethereum Futures open interest.
The significant amount of open interest in CME shows that there is an increase in the level of institutional participation in the Ethereum derivatives market. The CME offers a more regulated way of accessing Ether, which is drawing interest from institutions.
The high trading volumes in the derivatives market are not affecting Ether’s price, showing high liquidity in the market.
Spot Ether ETF Approvals Drive Market Gains
The approval of spot Ether ETFs by the US Securities and Exchange Commission has driven gains across the cryptocurrency market. Bitcoin recently rallied to $70,000 before retracing.
While Ethereum has failed to break the $4,000 resistance level, it holds on to 21% monthly gains. ETH has gained from around $2,800 in early March to around $3,800. It was trading at $3,833 on May 29.
The bullish momentum is fading, as seen with the Moving Average Convergence Divergence (MACD) line. The MACD line currently lies below the signal line, indicating a potential for more price dips.
If ETH loses support at $3,780, the bearish momentum will be confirmed, and the altcoin will plunge to lower levels.
The bulls could resume buying in the coming weeks as analysts are optimistic that spot ETH ETFs will start trading sometime in June. If that happens, it will ignite a notable increase in buying pressure, and ETH will break $4,000 and rally toward a new record high.
