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Why did ‘ETH denominated OI on CME climb to highest level since early April’

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Ethereum [ETH], the largest altcoin continues to see alarming signals concerning its price on a weekly basis. ETH remained in a bearish zone below the $1,280 and $1,250 resistance levels.

Now, ETH started a fresh decline (7%) and traded below the key $1,200 support zone. Thereby, closing red week after red week for the past 11 weeks.

That’s not all, the futures market saw some interest action as well.

A bear attack on both ends

It’s quite clear that Ethereum has immensely suffered in the spot market. ETH has been one of the worst-hit coins. And, it has been performing poorly as compared to the other cryptocurrencies at the moment.

Likewise, sentiment around the largest altcoin took a blow as well. The amount of positive commentary towards ETH fell to an alarmingly low level- a level not seen in over four years.

Source: Santiment

Santiment, an analytical platform, in a 29 June tweet opined,

Furthermore, the Chicago Mercantile Exchange (CME) ETH futures contracts are trading at a discount as compared to ETH’s spot price.

Source: Arcane Research

Here, CME’s front-month Ether futures have traded at a negative basis (below spot) since mid-May. The said divergence could hint at future losses for Ethereum. Meanwhile, Ether-denominated open interest on CME climbed to the highest level since early April (The blue uptick in the chart below).

Source: Arcane Research

Analyst at Arcane Research revealed that asset managers are shorting heavily, with asset manager net exposure sitting at -$37 million.

Bear-ing it all

Ethereum is currently in the process of migrating from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus algorithm. Although, ETH core developers announced the delay of a component that will lead to this upgrade.

Nonetheless, ETH holders have supported the network whatsoever. For instance, despite the aforementioned situation, Glassnode noted that the number of non-zero addresses reached an ATH of 83,076,411. One can expect holders to rise as ETH nears the much-anticipated Merge.

Source: Glassnode


Shubham is a full-time journalist/ Crypto data analyst at AMBCrypto. A Master's graduate in Accounting and Finance, Shubham's writings mainly focus on the cryptocurrency sector with particular emphasis on market research studies and communications for >2 years. Also, a die-hard Chelsea fan #KTBFFH.
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