- Ethereum open interest increased by 8.8% to $56.97B as leveraged positions entered the market at a steady pace after price gains from the spot market.
- Options volume increased by 37.9% because larger traders are using both directional and hedging strategies to prepare for upcoming volatility.
- Short liquidations totaled $181M in 24 hours, with sustained demand preventing a sharp price reversal after the squeeze.
Ethereum is trading above $4,200 for the first time since December 2021, supported by steady spot buying and controlled leverage growth.
Open Interest Growth and Spot Buying Activity
Market data shows Ethereum open interest rising 8.8% to $56.97 billion, indicating renewed leverage inflows. However, according to market watcher Axel Bitblaze, spot market purchases are driving the price gains, with leverage following rather than leading. This structure is considered healthier than rallies fueled mainly by aggressive funding rates.
Bitblaze noted that options trading volume surged 37.9%, suggesting larger market participants are preparing for increased volatility. Both directional positioning and hedging strategies appear to be active. This pattern has historically emerged ahead of extended price movements.
Funding Rates and Short Liquidations
Funding rates remain positive but moderate, indicating there is still capacity for traders to add positions before the market becomes crowded. Short sellers have faced $181 million in liquidations over the past 24 hours. Bitblaze observed that the price did not immediately reverse after the squeeze, implying strong ongoing demand.
He compared the current open interest-to-price behavior to pre-merge conditions, where open interest steadily increased while the price advanced in a measured fashion. This gradual build-up is viewed as more sustainable than rapid speculative spikes.
Near-Term Outlook and Caution Levels
Bitblaze suggested that if current conditions persist—moderate funding and continued spot buying—Ethereum could test $4,500 before cooling. However, he cautioned that a sharp simultaneous rise in both open interest and funding rates could warrant closer monitoring for overheating.
The present rally reflects a balance between leveraged activity and genuine market demand, with options activity signaling that institutional and high-volume traders are positioning for continued movement. The ability of the market to absorb profit-taking without sharp retracement is adding confidence among participants.
With Ethereum sustaining levels not seen in over three years, market attention remains focused on whether the ongoing momentum can extend toward the projected $4,500 mark while maintaining structural stability.
