Ethereum has seen a significant increase in futures open interest, reaching record levels. According to historical data, this may precede a significant price correction.

Surge in Ethereum Futures Open Interest

Between October 14 and 15, Ethereum gained 8.8% but struggled to surpass the $2,650 resistance level. Traders are concerned as ETH futures open interest hit an all-time high, which previously indicated major corrections. On October 16, the futures market reached 5 million ETH, up 12% from the previous month.

Potential Impact of Increased Demand

Higher demand for ETH futures doesn't necessarily indicate a bearish trend. The key is the level of leverage being used. Significant position liquidations on futures markets lead to 'cascading liquidations' greatly impacting spot markets. Furthermore, whales and market makers use derivatives for hedging, which is impossible in spot markets with lower liquidity.

Effect of Bitcoin Market Trends on ETH Price

While the overall market behavior during previous peaks in open interest varied, the current situation suggests a potential 20-25% decline in eth price if the market remains neutral. However, potential growth in Bitcoin above $70,000 could drive bullish momentum for Ethereum.

Historical data suggests a potential correction in Ethereum's price following peak open interest levels. However, precise forecasts depend on the development of general market trends.