A new Glassnode letter reveals a surge in the derivatives market and a more upbeat outlook among traders of bitcoin and Ethereum.
Glassnode’s latest research reveals that there is considerable investor interest in trading BTC futures markets and hoarding their ETH bags, despite the fact that the bitcoin price has been trading sideways with a little recovery and little volatility over the previous week.
Glassnode claims that the Bitcoin derivatives market has a low directional bias, which suggests that investors are trading cautiously despite the slight upward price rise.
Investors are more upbeat about Ethereum (ETH). This is because withdrawals from exchanges “are relatively minor” in comparison to the rising demand for the token as the Merge date draws near.
Following LUNA’s collapse, investors regain confidence
The collapse of Terra’s LUNA and UST tokens resulted in the loss of billions of dollars, as well as the mining capitulation in May and June. The collapse appears to have dissipated investors’ reluctance to trade derivatives again, according to Glassnode’s Future Open Interest (BTC) measure.
“Futures trade volume appears to have stabilized in the post-LUNA collapse era. Trade volume experienced a structural decline over the 12-months since the May 2021 sell-off, but appears to be re-establishing a floor at around $33B/day.”
“Futures trade volume appears to have stabilized in the post-LUNA collapse era. Trade volume experienced a structural decline over the 12-months since the May 2021 sell-off, but appears to be re-establishing a floor at around $33B/day.”
Additionally, the futures markets underwent a structural transformation over the previous 1.5 years. Even though leverage is still high, the underlying spread is significantly more stable and lower than it was at the beginning of 2021 when bitcoin was on a bull run.
For the first time ever, Bitcoin’s Open Interest gets flipped by Ethereum
For the first time ever, investors are currently more interested in trading Ethereum derivatives than bitcoin, with $6.6 billion in ETH traded versus $4.8 billion in BTC.
Additionally, this indicator reveals that the open interest in ETH options is close to exceeding the all-time high (ATH) milestone set in late November 2021, when the price of ETH was $4,900.
Given that the vast majority of investors are placing positive wagers on values between $2,200 and $5,000, the Ethereum Merge has significantly influenced the demand for ETH and the rise in its price. Ethereum should successfully switch to Proof of Stake after the Merge is finished without altering the data of the original Proof of Work chain because those two chains would join the same ecosystem, hence the term.
Ethereum supporters can now proudly claim that their prized currency is more in demand than Bitcoin, at least in the futures market. However, the flippening will have to wait.
