On-chain analytics firm Glassnode has revealed that the Ethereum futures market remains overheated, despite a recent long squeeze that saw $76.4 million in ETH long liquidations. The data suggests that while significant leverage has been flushed out, the market may still be primed for further volatility.
The Ethereum futures Open Interest, which tracks the total amount of open futures positions, has decreased from $20.5 billion to $15.9 billion following the liquidations. However, this value remains 22% higher than the yearly average of $13 billion, indicating elevated leverage levels in the market.
Historically, overheated futures markets have often led to increased price volatility for Ethereum. With the market still holding notable leverage, further sharp price action could be on the horizon. ETH saw a crash towards $2,100 yesterday but has since rebounded to around $2,800.
The current market conditions highlight the importance of risk management for Ethereum traders and investors. While the long liquidations have provided some relief, the persistent high Open Interest suggests that the market may not have fully stabilized. Cautious positioning and careful monitoring of leverage levels could be prudent strategies in the near term.
As the Ethereum market navigates this volatile period, it will be crucial to watch for signs of further deleveraging or potential catalysts that could trigger additional liquidations. The interplay between spot prices and futures market dynamics will likely continue to shape ETH’s trajectory in the coming days and weeks.
Tags: Ethereum, ETH, Futures Market, Liquidations, Open Interest, Leverage, Volatility
Source: https://www.newsbtc.com/news/ethereum/ethereum-leverage-despite-long-squeeze-glassnode/