Ethereum is now demonstrating steady price growth, recording a 6% increase over the past day as the broader cryptocurrency market has strengthened. This upward momentum follows news of a US executive order establishing a national reserve of digital assets, contributing to a positive market environment.
In this context, CryptoQuant analyst ShayanBTC provided a new perspective on Ethereum’s current trajectory. Shayan highlights an interesting divergence between the growing open interest on Ethereum futures and the price, which has yet to reach previous highs.
Rising futures market and divergent price action
According to Shayan in a post recently uploaded to the CryptoQuant QuickTake platform, Ethereum open interest, an indicator of active futures contracts, has risen to its highest levels in recent weeks, indicating increased market participation and growing interest among traders.
The analyst notes that ETH’s rising open interest and slow price response suggest a disconnect between market sentiment and price action. While futures traders appear optimistic, this optimism has not yet translated into breaking Ethereum’s key resistance levels. The analyst wrote:
Interestingly, there is a divergence between the price of Ethereum and the activity of the futures market. Despite the significant increase in open interest, the price has yet to surpass previous highs, demonstrating a potential imbalance between market expectations and price action.
Shayan also points out that high open interest could lead to volatility. Historically, large accumulations of open interest have been followed by significant price swings as positions are liquidated.
While the direction of the next move remains uncertain, current activity and sentiment are trending towards a potential bullish breakout. Shayan suggested that if Ethereum can break out of critical resistance, it could pave the way for a more prolonged rally.
Market concerns and bearish indicators
In contrast, another CryptoQuant analyst, Darkfost, presents a more cautious outlook. Darkfost points to a number of bearish factors, including rising Ethereum inflows and reserves on Binance.
According to data shared by Darkfost, since September 2024, Ethereum inflows have consistently exceeded outflows, leading to an increase in currency reserves. This trend reflects selling pressure, as more Ethereum is moved across exchanges, potentially indicating an intent to sell rather than hold.
Furthermore, Binance’s taker buy-sell ratio has remained bearish for months, showing a continued dominance of sell orders. Darkfost reveals that the change in these parameters suggests that some investors may be locking in profits or reallocating capital elsewhere, leading to more cautious market sentiment.
Featured image created with DALL-E, chart from TradingView