Ethereum has shown significant growth, trading above $4200 for the first time since December 2021. Steady spot buying and controlled leverage growth are contributing to this surge.
Open Interest Growth and Spot Buying Activity
Market data indicates Ethereum open interest rising 8.8% to $56.97 billion, signifying renewed leverage inflows. However, according to market watcher Axel Bitblaze, it is spot market purchases that are driving price gains, with leverage following rather than leading. This structure is viewed as healthier compared to rallies primarily fueled by aggressive funding rates.
Funding Rates and Short Liquidations
Funding rates remain positive but moderate, suggesting there is still capacity for traders to add positions before the market becomes crowded. Short sellers have faced $181 million in liquidations over the past 24 hours. Bitblaze observed that the price did not immediately reverse after the squeeze, implying strong ongoing demand.
Near-Term Outlook and Caution Levels
Bitblaze suggested that if current conditions persist—moderate funding and continued spot buying—Ethereum could test $4,500 before cooling. However, he cautioned that a sharp simultaneous rise in both open interest and funding rates could warrant closer monitoring for overheating.
The current Ethereum rally reflects a balance between leveraged activity and genuine market demand, with indications that institutional and high-volume traders are positioning for continued movement. Market attention remains focused on sustaining structural stability while moving toward the projected $4,500 level.
