Following the sudden drop in Ethereum price, the open interest indicator also dropped and reached the lowest level in months. However, the recent increase in buying pressure has led to a significant price increase. 📈 These sudden market movements are often linked to liquidations in the futures market. It is important to investigate whether this is the case again.

The chart shows the Open Interest indicator, which continuously shows the total of open positions in the futures markets. High values ​​generally indicate increased market volatility.

As seen in the chart, the recent increase in price occurred simultaneously with a sharp increase in Open Interest. This suggests that the futures market may be the driving force behind the recent bull rally. The significant increase in Open Interest indicates that a short liquidation cascade has occurred and is accelerating the upward movement of the market.

However, despite the steady upward trend in the Open Interest indicator, investors need to be careful. While rising readings can indicate potential upward market movements, it is important to remember that higher readings can come with significant liquidations and lead to unexpected declines in the market.