Ethereum’s derivatives market is showing clear signs of speculative overheating, with leverage ratios, open interest, and funding rates all rising. The last 30 days have seen ETH rally more than 24%, triggering a sharp expansion in derivatives exposure that now surpasses $24.5 billion in open interest, its all-time high.
This has pushed the estimated leverage ratio (ELR) close to historical peaks, while funding rates for perpetual futures have surged to levels not seen since early 2022.
The current structure of the derivatives market shows traders aggressively positioning for further upside. However, it also introduces a fragility that could quickly reverse if spot prices stall or correct. As traders increasingly rely on margin to sustain positions, the risk of large-scale liquidations escalates.
The aggregate open interest for Ethereum derivatives across all exchanges reached $24.5 billion, marking a 37% increase in 30 days. Around $2.9 billion of that increase came in the last week alone. The spike in OI comes as ETH rallied from below $2,600 to over $3,160, showing that the market has seen a real influx of speculative capital.
CryptoQuant data shows that Ethereum’s open interest now equals roughly 7.7 million ETH, which is about 6.4% of the circulating supply. This percentage helps us contextualize the degree of market exposure to leverage relative to available tokens. Historically, spikes in notional OI above 6% have preceded sharp corrections, indicating an overreliance on derivatives to fuel spot moves.
The 90-day correlation between Ethereum’s price and open interest stands at 0.96. This level of correlation typically points to a feedback loop between spot price appreciation and leverage deployment. As ETH rises, traders open more…
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