Ethereum is above $3,500 as open interest drops
Ethereum, the foremost platform for smart contracts on the Layer-1 blockchain, has seen a notable dip in its open interest, plummeting to $11.5 billion. This represents a $1.5 billion reduction within a fortnight, as reported by CryptoQuant.
The pinnacle of open interest for Ethereum was recorded on June 5, following which, liquidations amounting to $400M occurred, with long liquidations accounting for $285 million of that total.
Before this peak on June 5, Ethereum's highest ever recorded open interest was at $9.5 billion in 2021, coinciding with ETH’s price reaching a record high of around $4,800.
Open interest defines the collective total of derivative contracts that are open and yet to be settled.
Therefore, a reduction in open interest is generally a positive indicator for Ethereum, suggesting a decreased probability of drastic price fluctuations in any direction due to reduced leverage. Such fluctuations typically result in significant liquidations.
As of now, ETH has experienced a 2% increase in its value over the last 24 hours, currently trading at $3,616. CoinGecko states a modest growth of 3.1% for the asset over the past week.
The slight increase in Ethereum's value lately is mainly due to a spate of short liquidations, totaling $19.33 million in the last day, while long liquidations were reported at $11.11 million, as per the derivatives analytics firm Coinglass.
