Ethereum Derivatives Market Signals Unstoppable Bullish Momentum

Ethereum's open interest has surpassed its previous ATH (all-time high) , exceeding the $13 billion mark—an increase of over 40% in the past four months. This surge highlights growing engagement in Ethereum's derivative markets.

Currently, funding rates are moderately positive, signaling a prevailing dominance of long-position traders. This suggests a market sentiment favoring upward price movements in the short term.

Additionally, Ethereum's estimated leverage ratio, calculated by dividing the open interest by the exchange’s coin reserves, has also reached a new ATH, climbing to +0.40 for the first time. This metric indicates a significant rise in leveraged positions, reflecting increased risk-taking by investors in derivatives trading.

While these trends underscore positive market sentiment toward ETH, it would be prudent to remain mindful of potential risks. The elevated leverage and dominance of long positions could increase the likelihood of a long squeeze if sudden price volatility occurs, potentially leading to market corrections.