Brief on Ethereum ETF Inflow Situation: An interesting phenomenon in the market is that Ethereum ETF inflows have surpassed Bitcoin ETF inflows, marking the first time this has occurred since ETFs began trading, and there may be more complexity behind this than meets the eye.
Ethereum ETFs have historically lagged behind BTC in terms of inflows; however, on November 29, the inflow for ETH ETFs reached a peak of $332.9 million, creating a record for the highest daily inflow, surpassing the Bitcoin ETF inflow of $320 million on the same day, marking a win-win situation for Ethereum ETFs.
Historically, ETFs have influenced market direction, usually with spot demand aligning with derivative demand.
Open Interest Situation
Ethereum's open interest reached a new high in the past week, hitting a peak of $24.34 billion on November 30, creating a new high for this cryptocurrency, indicating increased demand in the derivatives space, and its surge in demand alongside Ethereum ETFs reflects a new wave of demand for cryptocurrencies.
Nature and Impact of OI Surge
Research indicates that the recent surge in open interest (OI) is a bullish behavior and is unrelated to short positions, as the financing rates for ETH across major exchanges have significantly risen, which positively impacts ETH price trends.
ETH Price Trend
ETH has been in a bullish flag pattern for the past few months, achieving a bullish breakout at the end of this week, breaking downward resistance levels and showing a clear performance on the weekly chart. Currently, the ETH price has risen to $3,706.08, with the potential to reach a new high in 2024, given Bitcoin's recent decline in dominance (which has steadily risen since the beginning of the year but has dropped nearly 7% in the last two weeks), there is a high possibility of a significant rebound for ETH.
Impact of Bitcoin's Status Change on ETH
Bitcoin's recent decline has led to the largest reversal of its dominance this year, which may herald the arrival of an altcoin season, as Bitcoin previously absorbed a large amount of liquidity, and after its status decline, investors may turn to altcoins. ETH is expected to benefit from this, with recent inflows into its spot ETF and surges in derivative open positions; however, traders should be cautious, as high open interest may expose ETH to the risk of leveraged long liquidations.
