TL;DR
- ETH trading volume remains elevated, driven by derivatives speculation rather than spot demand.
- Ethereum’s open interest quickly recovered to over $18 billion, growing 5.5% in 24 hours, faster than Bitcoin.
- Binance dominates open interest with $7.1 billion, increasing the risk of massive market liquidations.
Ethereum (ETH) volume remains at elevated levels, but the nature of this activity has significantly changed. The ETH market is becoming increasingly speculative, with notable growth in Binance activity and a generalized boost from the Ethereum derivatives market.
Unlike previous cycles, where spot demand and ecosystem growth drove the price, ETH’s current valuation seems to depend more on activity in derivatives exchanges. The open interest (OI) in ETH derivatives for this cycle already far surpasses the 2021 bull market, indicating a structural shift towards speculation.
Following a dip to the $3,000 level, the token recovered to $3,615.63. This recovery was accompanied by a rapid rebuilding of open interest, which again exceeded $18 billion after a recent low.
Binance’s Dominance Increases Liquidation Risks
Ethereum’s derivatives infrastructure has matured, but it has also centralized risk. Binance has consolidated its position as the dominant market, hosting $7.1 billion in ETH open interest. While Hyperliquid is also influential, its $1.8 billion share is considerably smaller.
This concentration on a single exchange can lead to more dramatic liquidations. As a result, in the last 24 hours, Ethereum experienced $90.64 million in short position liquidations, with Binance leading this activity.
Despite the volatility and rapid recovery of interest, the Ethereum derivatives market appears to be limiting the price within a defined range. Liquidity data shows accumulation of long positions, but also strong resistance. With short positions accumulating up to $3,700 and support at $3,300, analysts suggest that a move to $4,000 is unlikely in the short term.
