Ethereum: The Merge arrives soon, and the price of the ETH in sharp increas

 Open Interest: Ethereum surpasses Bitcoin for the first time!

This is historic. For the first time in the history of digital assets, Ethereum’s open interest is superior to that of Bitcoin. An element that actually seems to be a consequence of upgrading the Ethereum blockchain via The Merge.

Ethereum’s open interest is soaring!

Yesterday, the Glassnode platform noted that Ethereum’s open interest figures on the Deribit exchange exceeded those of Bitcoin on all exchanges. With $5.6 billion for Ethereum’s figures versus $4.3 billion for Bitcoin.

Good to know: Open interest measures the total amount invested in derivatives of a given asset. By “shorting” or “longing” an asset, the trader increases the open interest of that asset. More graphically, open interest synthesizes the permanent fight between bulls (bull) and bears (bear).

Earlier this weekend, open interest on ETH even climbed above $7 billion. And hedge funds seem to position themselves as the prince of cryptocurrencies. As the data from The Block suggests, the global open interest in Ethereum options reached 7.58 billion on 30 July. At the beginning of the month, this same indicator was $2.74 billion, an increase of more than 175% in just 30 days.

The Merge is expected!

If for the first time in history the open interest of Ethereum exceeds that of Bitcoin, it is for a particular reason: the upgrade of the blockchain Ethereum. Elements that today push some analysts to say that Ethereum could take, in the future, the step on Bitcoin.

While the migration from the Proof of Work to the Proof of Stake should save more than 99% of resources for the Ethereum blockchain, investors seem to take bets on a successful migration.

Not to mention that after the migration, Ethereum should become a deflationary asset. A significant factor in a context where inflation is dangerously flirting with the 10% whether in Europe or across the Atlantic. According to the latest data, the migration should take place on September 19.

Open interest: a tool to measure market sentiment!

In the world of trading, many tools can be mobilized. While technical analysis indicators are often used, some data such as open interest are crucial to understanding a market.

In practical terms, open interest is the value of all contracts outstanding on an asset that has not yet been settled. In other words, open interest specifies the number of contracts held by market participants or investors that remain in holding positions. Therefore, it is understandable why this tool can provide some clarity on market sentiment. But also about the forces behind prices.

Ethereum à 3 000 dollars en décembre 2022 ?

Be that as it may, if Ethereum goes up again, the asset may well drag the entire crypto market in its wake. Since its low point last June, Ethereum has just gained 90%. If we refer to the last 30 days, the token shows an increase of 49%, a level that largely over-performs the Bitcoin and its +19% in 30 days. Based on the various prediction algorithms, the $3,000 ETH scenario within 6 months does not seem unrealistic.