The post Ethereum price prediction – Will rising leverage drive or weaken ETH’s rally? appeared on BitcoinEthereumNews.com.

Ethereum has surged to a three-month high above $2,900 as bullish sentiment strengthens. The rising estimated leverage ratio and funding rates point towards rising speculative activity from derivative traders. Ethereum [ETH] has gained by 20% in just two days, with the price oscillating between $2,400 and $2,950. At press time, ETH traded at $2,922, its highest level in over three months.  The recent gains have been accompanied by rising volatility. In fact, the estimated leverage ratio has spiked significantly this week to a seven-day high.  At press time, this metric stood at 0.42. This shows that 42% of the open positions on the derivatives market are backed by leverage. A build-up of leverage activity tends to heighten price volatility.  Source: CryptoQuant However, the estimated leverage ratio has yet to hit extreme levels, giving Ethereum room to continue with the uptrend.  Funding rates & open interest hit multi-month highs  The newly opened positions on the derivatives market appear to be longs. This is seen in the rising funding rates to a three-month high.  When funding rates are rising, it shows an influx of long positions. It also indicates that long traders are willing to pay a higher fee to maintain their positions, further suggesting that there is a bullish bias in the market.  Source: CryptoQuant At the same time, Ethereum’s open interest continues to rise, and at press time, it was at a five-month high of $16.61 billion per Coinglass data.  In the last two days, Ethereum’s open interest has increased by more than $3 billion, further showing that speculative interest in ETH is high.  The spike in trading activity and open positions in the derivatives market increases the likelihood of high volatility. It could also indicate that ETH could be on the verge of an overheated market.  However, technical indicators…

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Filed under: News - @ November 8, 2024 9:18 pm