Ethereum, the leading smart-contract Layer-1 blockchain, has witnessed a sharp decrease in its open interest, which has dropped to $11.5 billion. It has dropped by $1.5 billion in the span of two weeks, according to data from CryptoQuant.
Open interest in Ethereum peaked on June 5, and since then, $400M of liquidations have taken place, with long liquidations standing at $285 million.
Prior to June 5, the previous all-time high in Ethereum’s open interest stood at $9.5 billion in 2021, when ETH’s price touched its all-time high of approximately $4,800.
Open interest is the total number of open derivative contracts that have not yet been settled.
Ethereum Price at 22-Month High as Open Interest Soars and Dencun Nears
Ethereum (ETH) continues to be the top coin. The second biggest digital asset by market cap is trading at 22-month highs on Monday. ETH is now priced at $$3,151, CoinGecko shows, having broke past the $3,000 mark for the first time since April 2022 last week. It has gained 3.5% since the same time yesterday and risen by more than 8% over the past week. Kaiko analyst Dessislava Aubert told Decrypt that "open interest just hit a multi-year high of $7.7 billion and funding rates are at their highes...
A decrease in open interest thus bodes well for Ethereum, as market sentiment points to there being less chance of wild price swings in either direction caused by excess leverage. When those swings happen, it leads to liquidations in either direction.
ETH is currently trading at $3,616, an increase of 2% in the past 24 hours. The asset clocked a moderate gain of 3.1% in the past 7 days, according to CoinGecko.
Ethereum’s recent uptick can be attributed to short liquidations, as $19.33 million was liquidated in the past 24 hours, while long liquidations stood at $11.11 million, according to derivatives analytics platform Coinglass.
On Tuesday, leading Ethereum developer Consensys announced that the U.S. Securities and Exchange Commission (SEC) has closed its investigation into Ethereum 2.0 without filing any charges.
“This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.” the company tweeted.
This development comes as a positive surprise for market participants, as previously a report indicated that the SEC had internally deemed the asset to be a security.
SEC Has Secretly Considered Ethereum a Security Since 2023, Says Consensys in Unredacted Lawsuit
The U.S. Securities and Exchange Commission (SEC) has internally considered Ethereum to be a security for over a year, according to previously redacted portions of a lawsuit filed by software giant Consensys against the SEC that were revealed this morning. Per Consensys’ complaint, Gurbir Grewal, the Commission’s Director of the Division of Enforcement, issued an internal Formal Order on March 28, 2023, announcing an investigation into “Ethereum 2.0,” authorizing employees of the regulator to in...
SEC Chair Gary Gensler has previously said that U.S. spot Ethereum ETFs are likely to launch sometime during summer, however, he refused to provide clarity on whether the SEC considered the asset a security or a commodity.
Institutions have already started to express their interest in Ethereum ETFs.
Pantera Capital Management LP plans on investing $100 million when trading in U.S. spot Ethereum ETFs begins, according to Bitwise Asset Management. If Pantera Capital follows through with the purchase, it will not be able to sell the purchased shares in the open market for a period of six months.
Earlier this month, global asset manager VanEck dubbed Ethereum “digital oil” and forecasted that the leading smart-contract cryptocurrency will reach $22,000 by 2030.
Edited by Stacy Elliott.
