First of all, I would like to say that I am bullish in the long term, 7500??
Recently, the Ethereum (ETH) market has shown multiple bullish signals. From November 20 to 27, the price of Ethereum soared 15% in a week, approaching $3,500 for the first time in four months. At the same time, the total open interest of Ethereum futures hit a record high of $22 billion. This series of data has aroused strong attention from the market. Does it mean that the Ethereum bull market has quietly arrived?
1. Futures open interest hits new high, with a massive influx of funds
Data shows that the total open interest in the Ethereum futures market in November increased by 23% month-on-month, setting a new record high. In comparison, the data was only $18 billion in August, and when the price of Ethereum exceeded $4,000 in May this year, the open interest was only $14 billion. This growth not only reflects the accelerated inflow of funds, but also shows that the market's attention to Ethereum has increased significantly.
More importantly, the current growth of the Ethereum futures market is not driven solely by retail investors. According to the data, mainstream exchanges Binance, Bybit and OKX account for 60% of the market share, while the open interest of the Chicago Mercantile Exchange (CME) has climbed to US$2.5 billion, a significant increase in its share. This institutional trend shows that more and more professional investors and institutions are beginning to bet on the long-term value of Ethereum, further establishing market confidence.
2. Institutional participation soars, and the bull market foundation becomes more solid
The involvement of institutional investors is usually seen as a sign of market maturity, and CME's performance is particularly outstanding. As a representative institution in the traditional financial field, the growth of CME's Ethereum futures positions shows that institutions are increasingly interested in Ethereum. This is not only a recognition of the cryptocurrency market, but also an affirmation of Ethereum's potential in decentralized finance (DeFi) and Ethereum 2.0 upgrades.
At the same time, the annualized premium of Ethereum's two-month futures has exceeded the neutral threshold of 10% and has remained at around 17% in the past week. This shows that even in an environment with high leverage costs, there is still a lot of money willing to maintain long positions. Such a premium level usually reflects the market's positive expectations for Ethereum's future prices.
3. Fundamental support: Ethereum ecosystem continues to grow
In addition to the outstanding performance of the futures market, Ethereum's fundamentals are also strong. In the past few years, Ethereum has become the core infrastructure of DeFi, NFT and Web3, and its network effect continues to strengthen. The advancement of Ethereum 2.0 has further alleviated the problem of network congestion and reduced energy consumption, which has provided confidence for more institutions and developers.
In addition, Ethereum's deflation mechanism (EIP-1559) has shown its effect. So far, the amount of ETH destroyed has continued to rise, further reducing the circulating supply and forming a natural value support. Driven by the supply and demand relationship, the scarcity of Ethereum will gradually emerge, thereby boosting prices.
4. Retail investor sentiment has not yet been fully released, and further upside is expected
It is worth noting that despite the increase in market activity, retail investors' enthusiasm for participation has not yet been fully released. According to data, the current financing rate of perpetual contracts is close to neutral, indicating that retail investors have not poured in on a large scale. This is in stark contrast to the crazy retail investors' pursuit of rising prices at the end of the bull market, and instead provides more room for continued price increases in the future. Once Ethereum breaks through the key psychological resistance level of $4,000, market sentiment may further heat up, attracting more funds to flow in.
5. Risks are controllable and long opportunities are gradually emerging
Although the volatility of the crypto market is high, the dominance of institutions is stabilizing market sentiment. In the past week, the total liquidation of the Ethereum market was only $163 million, which is significantly lower than the previous period of large fluctuations. This situation shows that the market's risk resistance is increasing, and the decline in the leverage ratio of retail investors has reduced the possibility of large-scale sell-offs.
At the same time, more and more investors are beginning to adopt low-risk strategies such as cash arbitrage, providing a healthier funding environment for the market. In this context, the price correction of Ethereum may be limited, thus providing a more robust basis for long positions.
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The bull market is on the way, and a breakthrough is only a matter of time!
Judging from recent market data, Ethereum's upward trend has gradually formed. From the continued increase in positions by institutional investors to the historical high of futures open interest, to strong fundamental support, Ethereum's bull market foundation has been gradually consolidated. Although it may experience fluctuations in the short term, in the long run, it is only a matter of time before Ethereum breaks through $3,500 and moves towards $4,000.
For us, the current market is in a critical layout stage in the early stage of the bull market.
Under the premise of carefully controlling risks, buying on dips may be the best strategy to seize the dividends of this round of bull market!!!