Ethereum (ETH) futures open interest surged to an all-time high of 9 million ETH as of January 17. This milestone follows a 10% increase in open interest over two weeks, reflecting a growing appetite for leveraged positions despite a retest of Ethereum’s $3,000 support on January 13. Now traders are questioning whether this move is a sign of growing bullish sentiment or rising market volatility. .
Ether futures aggregate open interest in ETH. Source: Coinglass
Binance, Bybit, and Gate.io collectively control 54% of the market, with the Chicago Mercantile Exchange (CME) trailing by $3.2 billion, or 10% of open interest, according to CoinGlass data. These conditions highlight the relatively low institutional adoption of Ethereum compared to Bitcoin (BTC), which CME estimates accounts for 28% of open interest.
In a futures contract, all bidders (buyers) are matched by sellers (sellers), so the increase in open interest is inherently unoptimistic. To determine sentiment, traders analyze the cost of holding a leveraged position, such as futures premium.
Futures premiums and options reflect market confidence.
Ethereum futures 2-month annual premium. Source: Laevitas.ch
The annual premium for ETH monthly futures was 12% on January 17, recovering from 10% on January 12. This indicator, which typically ranges from 5-10% in neutral conditions, reflects optimism about Ethereum’s recovery after its poor performance. The cryptocurrency market increased by 12% in 30 days.
Ethereum 2-month options 25% delta skew. Source: Laevitas.ch
Likewise, the 25% delta skew of Ethereum options contracts, which measures demand for bullish versus bearish bets, reached -4% on January 17. This skew is a signal that put (sell) options are slightly cheaper than calls (buy). It lies within a neutral range of -6% to +6%.
Collectively, these indicators suggest that the confidence of professional traders is resilient. Nonetheless, the leverage demand for retail traders in Ether perpetual contracts, also known as inverse swaps, must be evaluated. Because these instruments have short settlement periods, they closely follow spot prices. The funding ratio reflects which side (buy or sell) requires more leverage.
Ethereum perpetual futures 8-hour funding rate. Source: Coinglass
The current indicator is 0.9% per month, the same level as the previous week. This ratio, which lies in a neutral range of 0.5% to 1.9%, indicates balanced market sentiment without excessive bullish or bearish leverage, leaving room for future price upside.
Macroeconomic factors and World Liberty Financial’s role in boosting ETH sentiment
The broader macroeconomic environment has also strengthened confidence in the ETH market. Softer-than-expected December inflation data has led to a surge in optimism across financial markets, raising expectations of multiple interest rate cuts from the Federal Reserve throughout 2025. Easing monetary policy is generally beneficial for cryptocurrencies. This is because lower interest rates reduce the opportunity cost of taking on risk. asset.
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Adding to the bullish sentiment is the participation of World Liberty Financial, a cryptocurrency project with close ties to US President-elect Donald Trump, which has been actively purchasing cryptocurrencies, including ETH, as recently as December 2024. The company’s strategy is consistent with Trump’s public statements in support of blockchain. Innovation and digital assets.
Despite the 11% drop in ETH’s price over the past 30 days, there is still room for a bounce, with the price likely to test $4,000 in the coming weeks, driven by improving trader sentiment and institutional participation.
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.