First, my viewpoint: Long-term bullish, $7,500👌
Recently, multiple bullish signals have appeared in the Ethereum (ETH) market. From November 20 to 27, Ethereum's price soared 15% in a week, approaching $3,500 for the first time in four months. At the same time, the total open interest in Ethereum futures reached a historical high of $22 billion. This series of data has drawn strong attention from the market; does it mean that the Ethereum bull market has quietly arrived?
1. Futures open interest hits a new high, with a large influx of capital.
Data shows that the total open interest in the Ethereum futures market increased by 23% month-on-month in November, setting a historical high. In comparison, this figure was only $18 billion in August, and when Ethereum's price broke through $4,000 in May of this year, the open interest was only $14 billion. This growth not only reflects the accelerated inflow of funds but also indicates a significant increase in market attention towards Ethereum.
More importantly, the current growth of the Ethereum futures market is not solely driven by retail investors. According to the data, mainstream exchanges Binance, Bybit, and OKX account for 60% of the market share, while the open interest at the Chicago Mercantile Exchange (CME) has climbed to $2.5 billion, showing a significant increase. This trend towards institutionalization indicates that more and more professional investors and institutions are starting to bet on Ethereum's long-term value, further solidifying market confidence.
2. Institutional participation is soaring, and the foundation of the bull market is becoming increasingly solid.
The involvement of institutional investors is often seen as a sign of market maturity, and the performance of CME is particularly outstanding. As a representative institution in the traditional financial sector, the growth of CME's Ethereum futures positions indicates that institutional interest in Ethereum is continuously heating up. This is not only recognition of the cryptocurrency market but also affirmation of Ethereum's potential in decentralized finance (DeFi) and after the Ethereum 2.0 upgrade.
Meanwhile, Ethereum's two-month futures annualized premium has exceeded the neutral threshold of 10% and has remained around 17% in the past week. This indicates that despite the high cost of leverage, a significant amount of capital is still willing to maintain long positions. Such premium levels typically reflect the market's positive expectations for Ethereum's future price.
3. Fundamental support: The Ethereum ecosystem continues to grow.
In addition to the impressive performance of the futures market, Ethereum's fundamentals are also strong. Over the past few years, Ethereum has become the core infrastructure for DeFi, NFTs, and Web3, with its network effects continuously strengthening. The advancement of Ethereum 2.0 has further alleviated network congestion while reducing energy consumption, which has provided confidence for more institutions and developers.
In addition, Ethereum's deflationary mechanism (EIP-1559) has begun to show results. As of now, the amount of ETH destroyed has been continuously rising, further reducing the circulating supply and forming a natural value support. Driven by the supply-demand relationship, Ethereum's scarcity will gradually become apparent, thus propelling price increases.
4. Retail sentiment has not yet been fully released, further upward space is expected.
It is worth noting that although market activity has increased, retail investors' enthusiasm has not yet been fully released. According to the data, the current funding rate for perpetual contracts is close to neutral, indicating that retail investors have not entered on a large scale. This contrasts sharply with the frantic buying behavior of retail investors at the end of a bull market, instead providing greater room for future price increases. Once Ethereum breaks through the key psychological resistance level of $4,000, market sentiment may further heat up, attracting more capital inflow.
5. Risk is controllable, and long opportunities are gradually emerging.
Although the cryptocurrency market is highly volatile, institutional dominance is stabilizing market sentiment. In the past week, the total amount of Ethereum market liquidations was only $163 million, significantly down compared to previous periods of large fluctuations. This situation indicates that the market's risk resistance is strengthening, and the decrease in retail leverage has actually reduced the likelihood of large-scale sell-offs.
Meanwhile, an increasing number of investors are adopting low-risk strategies such as cash arbitrage, providing a healthier funding environment for the market. In this context, the price pullback of Ethereum may be limited, offering a more robust basis for going long.
---
The bull market is on the way; a breakthrough is only a matter of time!
From recent market data, the upward trend of Ethereum has gradually formed. From the continued accumulation by institutional investors to record highs in futures open interest and strong fundamental support, the foundation of Ethereum's bull market has been steadily solidified. Although there may be fluctuations in the short term, in the long run, it is only a matter of time before Ethereum breaks through $3,500 and heads towards $4,000.
For us, the current market is at a critical layout stage in the early phase of the bull market.
Under the premise of cautiously controlling risk, buying on dips may be the best strategy to seize the benefits of this bull market!!!
