U.Today - recent developments in the futures are causing a stir. The charts are whispering some alarming messages, and those in the know are paying close attention.
Open interest is an essential metric for understanding the futures market. It represents the total number of outstanding futures contracts that have not yet been settled. When open interest is high, it indicates that many traders have open positions on the market. For Ethereum, open interest has been ramping up continuously. But what does this mean? And more importantly, why should we be concerned?
Source: The recent charts for depict ever-increasing open interest. The continual upward trend in open interest indicates a growing number of investors betting on the future price movements of ETH, either up or down. While high open interest can be seen as a sign of heightened activity and interest in Ethereum, it also suggests that there is a lot of speculative trading happening. Speculative trading, as history has shown us, can lead to intense volatility.
