Since Trump was elected president, the cryptocurrency market has been rising day by day. Ethereum hit $3,442 yesterday (12), setting a new high since July and soaring by more than 31.3% in the past week.
In the past 12 hours, Ethereum has continued to fluctuate between $3,200 and $3,300. At press time, it was temporarily reported at $3,275.8, down 1.41% in the past 24 hours.
Ethereum's outstanding performance in the past week has driven market funds back into Ethereum. At the same time, investors are also closely watching whether it is at risk of falling back below $3,200.
Ethereum demand is strong
1) OI hits new high
During the past seven days of Ethereum's rebound, ETH positions in the futures market have increased. CryptoQuant data shows that Ethereum's total open interest (OI) in the derivatives market increased from 9.8 million ETH on November 5 to 13.2 million ETH on November 11, setting a new record high, with a growth rate of 34.69%.
Although the high level of OI indicates that volatility may be greater and investors need to be cautious, many traders are optimistic about this. Trader Alan tweeted: "ETH finally hit a new high in futures open interest, showing that interest in the king of altcoins is finally back."
Olek, a trader who shares the same stance, noted that Ethereum’s rising OI indicates increased liquidity and market participation. He added:
Ethereum, in particular, is signaling a comeback, with increased activity suggesting the market is ready for action.
2) Transaction volume exceeds Bitcoin
Ethereum's growth once exceeded that of Bitcoin on the 10th, attracting market funds to favor Ethereum, and its trading volume once surpassed that of Bitcoin.
3) Increased on-chain activity
As Ethereum's growth is obvious to all, the activity on the Ethereum chain has also increased. Its daily active addresses (DAA) increased from 306,751 on November 5 to 388,350 on November 12, a growth of 26.6%.
In addition, DappRadar data shows that the Dapp transaction volume, number of transactions, and NFT transaction volume on the Ethereum chain have increased by 41.18%, 11.33%, and 89.02% respectively in the past week, indicating that the Ethereum network is active, which will provide support for the price of Ethereum.
4) Spot ETF net inflows hit a record high
Ethereum's impressive growth has also attracted traditional financial funds. SoSoValue data shows that the Ethereum spot ETF had a total net inflow of US$295 million on November 11, setting a record for the largest single-day net inflow in history, breaking the record of US$106 million set by the Ethereum spot ETF on July 23 when it was launched.
CoinShares data also showed that in the week ending November 8, Ethereum-related investment products had inflows totaling $157 million, with inflows reaching $915 million year-to-date and assets under management reaching $12 billion. CoinShares commented:
This is the largest inflow since the ETF was launched in July this year and marks a significant improvement in market sentiment.
Funding rate hits 8-month high, is this a warning sign?
High bullish demand for Ethereum also caused its 8-hour funding rate to surge above 0.054% (6.1% monthly), hitting an 8-month high. Investors questioned whether excessive leverage in Ethereum futures would increase the risk of a further correction below $3,200.
However, compared to Ethereum’s high of over $4,000 in March this year, when the funding rate peaked at 11% per month, the current funding rate is not too exaggerated.
In addition, to evaluate the sentiment of traders from the perspective of the Ethereum options market, the 25% Delta Skew indicator can be observed. This indicator mainly measures the demand of market participants for the risk of price decline. When Delta Skew exceeds 6%, it means that arbitrage traders and market makers charge higher fees for downside protection (put options), suggesting that the market is more concerned about downside risks. When the Delta Skew indicator is below -6%, it indicates that the market is optimistic.
Data shows that Ethereum investors are still neutral as the Delta Skew indicator has not fallen below -6%. This means that despite the recent increase in demand for Ethereum futures, this phenomenon does not represent the overall market sentiment. If there is a broader optimism in the market, the 6.1% monthly funding rate may pose a risk, but this is not the case at present.
