Ethereum Market Observes Pileup Of Leverage As ETH Breaks $2k

Name	Symbol	Market	Market Cap ($)	Algorithm
Ethereum	ETHUSD	Crypto	367,087,262,201	Not Mineable

Name

Symbol

Market

Market Cap ($)

Algorithm

Ethereum

ETHUSD

Crypto

367,087,262,201

Not Mineable

	Price Change	Price Change %	Current Price	Bid Price	Offer
	-36.14	-1.17%	3,064.17	3,063.68	3,064.17

Price Change

Price Change %

Current Price

Bid Price

Offer

-36.14

-1.17%

3,064.17

3,063.68

3,064.17

High Price	Low Price	Open Price	Prev. Close	52 Week Range
3,128.28	2,990.00	3,098.89	3,100.31	1,520.85 - 4,093.88

High Price

Low Price

Open Price

Prev. Close

52 Week Range

3,128.28

2,990.00

3,098.89

3,100.31

1,520.85 - 4,093.88

Exchange	Last Trade	Size	Trade Price	Currency
GDAX	18:13:27	0.063770	3,064.17	USD

Exchange

Last Trade

Size

Trade Price

Currency

GDAX

18:13:27

0.063770

3,064.17

USD

Price x Volume	Volume	Base Symbol	Related Pairs
300,189,774.34	98,069.84	ETH	ETHEUR	ETHGBP	ETHBTC

Price x Volume

Volume

Base Symbol

Related Pairs

300,189,774.34

98,069.84

Ethereum Market Observes Pileup Of Leverage As ETH Breaks $2k

13/08/2022 8:00pm

NEWSBTC

Data shows a large amount of leverage has been piling up in the Ethereum futures market as the price of the crypto breaks above $2k. Ethereum Open Interest Surges To Highest Value In Last 4 Months As pointed out by an analyst in a CryptoQuant post, the ETH futures market has seen the leverage sharply going up recently. The “open interest” is an indicator that measures the total number of Ethereum futures contracts currently open in all derivatives exchanges. When the value of this metric rises up, it means investors are opening up more positions on the market right now. Since more futures positions imply that leverage is also going up in the market, such a trend can lead to higher volatility in the price of the coin. On the other hand, lowering values of the indicator suggest holders are closing up their positions at the moment. This kind of trend can result in a less volatile value of ETH. Related Reading: Bitcoin Bearish Signal: Whales With 1k-10k BTC Depositing To Exchanges Now, here is a chart that shows the trend in the Ethereum open interest over the course of 2022 so far: Looks like the value of the metric has shot up in recent days | Source: CryptoQuant As you can see in the above graph, the Ethereum open interest has observed some sharp uptrend during the past couple of weeks. The indicator has now reached a value of 7.4 billion, the highest it has seen during the last four months. However, there is an interesting comparison here. Related Reading: New Findings Shows Institutional Investors Take More Interest In Ethereum Around 4 months ago, when such values were previously observed, the price of ETH was about $3.3k. But today the price is just $2k, around $1.3k less than it was back then. And yet, the open interest is at the same level, meaning the Ethereum market might be having the same degree of leverage this time as well, while the price is much lower. When especially high leverage accumulates in the futures market, any sharp swing in the price can liquidate a large number of positions at once. These liquidations then further amplify this price move, which liquidates more positions. In this way, liquidations can cascade together, and the event is called a “liquidation squeeze.” This is the reason behind the volatility of an overleveraged market. If a long squeeze does end up taking place this time, then the latest rally in the value of ETH may hit the breaks. ETH Price At the time of writing, Ethereum’s price floats around $1.9k, up 5% in the past week. The value of ETH seems to have gone up during the last few days | Source: ETHUSD on TradingView Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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