Ethereum Hits Level Not Seen Since January: Rally-Fueling Trades Could Turn Risky!
Ethereum’s open interest in futures reached its highest level since January at approximately $17 billion. Santiment stated that rising participation could support the rally but could increase liquidation risk if the price stalls.
According to the Sanbase chart in Santiment’s September 22 post, Ethereum’s open interest stood at $16.97 billion. The platform described Ethereum as the asset where derivatives participation stood out during the latest rally.
Open interest refers to futures contracts that have not yet been closed. The chart shows the total value of these contracts in dollar terms; therefore, the approximately $17 billion figure does not mean newly entered cash into Ethereum or trades betting solely on a rise.
What risk did Santiment highlight?
According to the platform, open interest rising alongside the price indicates that investors are following the rally and moving toward taking on more risk in derivatives trades. As long as buying in the spot market remains strong, this participation could support upward momentum.
However, if leveraged positions continue to accumulate while the price fails to advance, the same trades could become the source of new liquidations. Santiment’s warning is based on this condition; rising open interest alone is not a bearish signal or proof of the direction of the trades. Price changes can also affect the dollar-denominated value of open interest.
Open interest rose despite short liquidations
Santiment reported that more than $120 million in short positions were liquidated in Ethereum during the rally in question. The platform linked the rise in open interest despite these closures to the entry of new trades. This interpretation does not mean that the newly opened positions were also shorts.
On the same chart, Bitcoin’s open interest value was listed at $25.84 billion, while Solana’s stood at $2.97 billion. Santiment also stated that open interest across the market rose by 7.6% during the latest rally. What set Ethereum apart in this comparison was that its own open interest value reached its highest point since January.