Ethereum

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<p>The excitement surrounding the potential approval of a spot <a href="https://www.cryptopolitan.com/expert-spot-ethereum-etf-approval-by-may-or/">Ethereum</a> exchange-traded fund (ETF) in the United States has driven Ethereum futures open interest to a staggering $10.6 billion.&nbsp;</p> 
<p>With Ether (ETH) prices surging by 38.5% over the last 30 days, reaching $3,165, investors are closely monitoring developments in anticipation of the Securities and Exchange Commission (SEC) regulatory decisions.</p> 
<h2 class="wp-block-heading" id="rising-demand-for-leverage-spurs-anxiety-among-bulls">Rising demand for leverage spurs anxiety among bulls</h2> 
<p>The surge in Ethereum futures open interest has sparked anxiety among bullish investors, particularly as it approaches the peak of $11 billion in November 2021, followed by a significant correction of 55%.&nbsp;</p> 
<p>However, data indicates that before February 12, Ether Futures’ open interest had remained below $8.5 billion for two years. Within two weeks, it skyrocketed to the current $10.6 billion, signaling a substantial increase in leverage demand. Despite this, analysts caution that the metric alone does not provide insight into the balance between long and short positions.</p> 
<p>Analysts from JPMorgan Investment Banking suggest a 50% likelihood of an Ether ETF approval by May, contributing to the growing investor optimism. Additionally, some, including Keyrock’s CEO Kevin de Patoul, view the transition of Ethereum to a proof-of-stake consensus model and the introduction of staking yield as factors that could influence the SEC’s perspective on a potential ETF.</p> 
<p>Furthermore, capital inflows into liquid-staking derivative applications such as EigenLayer have surged, with the protocol securing $100 million in funding from venture capital firm Andreessen Horowitz (a16z). EigenLayer’s total value locked (TVL) jumped from $1.8 billion to $8.3 billion in just 30 days until February 26. This trend underscores the growing interest in Ethereum-based financial instruments and protocols.</p> 
<h2 class="wp-block-heading" id="healthy-derivative-metrics-suggest-bullish-sentiment">Healthy derivative metrics suggest bullish sentiment</h2> 
<p>Despite the rapid price gains, derivative metrics indicate a healthy market sentiment. The <a href="https://www.cryptopolitan.com/arbitrum-reports-revenue-boost-the-past-year/">Ethereum</a> futures premium, known as the basis rate, has been hovering around 15% since February 14, a level typically associated with bullish sentiment without signs of excessive leverage. In contrast, the 22% annualized premium observed on January 3 indicated a higher liquidation risk, signaling overly optimistic sentiment among traders.</p> 
<p>Additionally, analysis of options markets provides further insight into investor sentiment. The 25% delta skew, which measures the balance between call and put options, currently stands at -3%. This indicates balanced pricing between buying and selling options, with traders exhibiting skepticism towards Ether’s ability to sustain levels above $3,000. The neutrality of this indicator since February 20 suggests cautious optimism among traders rather than excessive confidence in Ether’s price trajectory.</p>

Ethereum futures open interest hits $10.6 billion amid speculation of spot ETF approval

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