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Ethereum is now demonstrating consistent price growth, posting a 6% increase over the past day as the broader cryptocurrency market has rallied. This upward momentum follows news of a US executive order establishing a national digital stockpile, contributing to a positive market environment.
Amidst this backdrop, crypto analyst Shayanbtc provided a new perspective on Ethereum’s current trajectory. Shayan highlights an interesting divergence between the growing open interest in Ethereum futures and the price, which has yet to reach previous highs.
Growing Futures Market and Divergent Action
According to Shayan in an article recently uploaded to crypto platform Quicktake, Ethereum’s open interest – an indicator of active futures – has increased to its highest levels in recent weeks, indicating increased market participation and growing interests among traders.
The analyst notes that ETH’s increase in open interest and sluggish price response suggest a disconnect between market sentiment and price performance. Although futures traders appear optimistic, this optimism has not yet translated into Ethereum breaking key resistance levels. The analyst wrote:
Interestingly, there is a divergence between Ethereum price and futures market activity. Despite the significant increase in open interest, price has yet to break out of its previous highs, presenting a potential imbalance between market expectations and price action.
Shayan also notes that high open interest could lead to volatility. Historically, large accumulations in open interest have been followed by large price swings as positions are liquidated.
Although the direction of the next move remains uncertain, current activity and sentiment are leaning toward a potential optimistic breakout. Shayan suggested that if Ethereum could break critical resistance, it could pave the way for a more extended rally.
Market concerns and bearish indicators
On the other hand, another crypto analyst, Darkfost, presents a more cautious outlook. Darkfost points to a range of bearish factors, including increased Ethereum inflows and reserves on Binance.
According to data shared by Darkfost, since September 2024, Ethereum inflows have consistently exceeded outflows, leading to an increase in exchange reserves. This trend reflects selling pressure as more Ethereum is moved onto exchanges, potentially indicating an intention to sell rather than hold.
Furthermore, Binance’s Buy-Sell ratio has remained bearish for months, showing consistent dominance of sell orders. Darkfost reveals that the change in these metrics suggests that some investors may be locking in profits or reallocating capital elsewhere, leading to more cautious market sentiment.
Featured image created with Dall-E, chart from TradingView
