Key Insights:
Ethereum's open interest has surged 25% in futures and 36% in options.
It currently has an open interest of $24 billion in futures and $10.7 billion in options.
Technical charts also show a breakout and indicate a higher shift in Ethereum's price.
Experts suggest fair value targets of $6000 to $10,000.
Ethereum's future open interest has hit $24.2 billion in nominal volume, rising 25% higher than the past week and around 9% in the last 24 hours, at press time. This is equivalent to roughly 6.65 million ETH.
This rise in open interest signals a possible shift in Ethereum's price, as generally, an increase in open interest indicates a rally in that crypto.
Open Interest refers to the total sum of all the nominal values of ETH derivatives available in the market. It is usually used in crypto markets to gauge market participation in any crypto. The higher the surge in open interest, the higher the rally in that crypto. Low open interest, on the other hand, denotes market decisiveness.
If this surge in OI transcends into an ETH rally, it could take ETH's price towards $4000 above which ETH may soon cross above its ATH of $4,891 (16 Nov 2021). Lately, the price of Ethereum has struggled to grow despite a large gain in other top cryptocurrencies like Bitcoin, Cardano, XRP and Solana.
Ethereum is one of the central assets of the crypto ecosystem, acting as a pillar for multiple crypto projects, including around 50 layer-2 chains, thousands of DeFi protocols, and innumerable Dapps. Yet, it was under serious selling pressure due to bad-performing ETFs and a few whales that had been selling it.
Options form the second most important part of crypto derivatives, and option open interest is considered to be a more accurate representation of market movement. This is because they provide greater information, indicating how much movement is possible in crypto.
The total Options OI in ETH is around 10.12 billion, 16% higher than yesterday's $8.7 billion and 37.6% higher than last week's $7.35 billion. Among exchanges, Derebit has the highest OI in options, with Binance and OKX being other notable exchanges in terms of derivative trading.
A larger shift in Ethereum options compared to futures shows that a price rally might be imminent. Taking a deeper look, we see that among different strike prices.
On the OI chart, there is significant open interest at $3800 and then $4000, which means that a low-key bullish move could help ETH reach $3800 at the least, and a decent move may take it to $4000.
Since the options data accurately aligns with futures data, we can be sure that a strong move is expected in Ethereum. Now, let us use technical charts to better understand how far ETH can realistically go.
Ethereum has shown a breakout in daily charts. The price of ETH has decisively crossed a resistance at $3640, which it could not have done earlier. This breakout indicates that ETH may soon move above $3900 and then $4100 (according to charts).
ETH-USDT1D Charts Confirming Price Breakout
Tradingview
Further, momentum indicators like RSI and MACD have also shown high momentum in ETH's price. RSI on ETH has reached 70, and MACD is in a positive crossover zone.
Experts agree that ETH is undervalued in the current markets, with some even suggesting that $10,000 is a fair valuation.
Ryan Sean Adams, co-founder of Bankless, suggests that ETH has a fair price of $10k and may soon move towards it because it is a triple-point asset.
Other experts, like Ali Martinez, suggest a mid-term target of $6,000. The expert also adds that the long-term estimates are close to $10,000.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.