Mr.Tayyab

06/12 15:50

Ethereum (ETH) teased a move past $2,900 on Wednes

Ethereum (ETH) teased a move past $2,900 on Wednesday but lost momentum after rising to an intraday high of $2,878 as its rally halted abruptly. ETH faces resistance at around $2,850 but briefly crossed this level after its futures open interest surged to an all-time high of 15.21 million ETH. Funding rates have also risen, indicating a growing risk appetite among ETH investors. 

The Chicago Mercantile Exchange (CME) accounted for most of the OI growth, with the Volatility Shares 2x Leveraged ETH ETF as the main catalyst behind the increase. The surge shows that institutional investors were behind the growing leverage demand. According to a K33 Research report, the ETH equivalent exposure of ETHU rose by 305,100 ETH, while the CME’s ETH OI rose by 295,250 ETH. The report concluded, 

“In other words, without VolatilityShares, CME's ETH OI would have declined by 9,850 ETH over the past two months. It is concerning to see one single entity cornering such a massive share of the market on CME, and it originates from a bunch of traders thirsting for leveraged long exposure in ETH.”

ETH started the previous week positively, rising nearly 3% to cross the 20-day SMA and $2,600 to settle at $2,607. The price registered a marginal decline on Tuesday but recovered on Wednesday to reclaim $2,600 and move back to $2,607. Bearish sentiment intensified on Thursday as ETH plunged over 7%, slipping below the 20-day SMA and $2,500 and settling at $2,415. Despite the overwhelming selling pressure, ETH recovered on Friday, rising almost 3% to $2,479.

Buyers retained control on Saturday as the price rose almost 2% to reclaim $2,500 and settle at $2,525. However, it was back in the red on Sunday, dropping 0.57% to end the weekend at $2,511. ETH started the current week on a bullish note, rising nearly 7% to cross the 20-day SMA and settle at $2,680. Buyers retained control on Tuesday as the price rose over 5% to cross $2,800 and settle at $2,816. ETH raced to an intraday high of $2,878 on Wednesday but lost momentum after reaching this level and dropped 1.56% to slip below $2,800 and settle at $2,772. The current session sees the price marginally down, trading around $2,752.

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