Over the past week, Ethereum has struggled to sustain significant gains. The second-largest cryptocurrency regained the $3,300 price level but was unable to cross $3,400 to continue its path to higher price levels. As it stands, the Ether token appears to have a bearish structure in the short term. However, on-chain valuations were recently released, suggesting that market participants may be bracing for a big move in the short term.
Ethereum futures activity hits monthly high following market shutdown
Recently QuickTake Posts On the CryptoQuant platform, analytics group Arab Chain revealed that Binance’s derivatives market has seen a recent surge in futures trading activity. This exposure is based on the Binance: ETH Futures Daily Volume indicator, which monitors the total volume of Ethereum futures contracts traded daily on Binance, and therefore reflects market activity, trader participation, and potential leverage exposure.
The latest measurements of this indicator highlight a significant change, with trading volume rising to $21.7 billion. The figure reflects strong momentum returning to the futures market and is the highest level since mid-December, Arab Chain said.
Notably, the surge in futures trading volumes was preceded by a period of relative decline in the second half of December. This event coincides with a period of price stabilization as risk appetite among traders diminishes. Interestingly, institutional investors also contributed to widespread risk aversion. Arab Chain said the decline is a typical sign that market participants want to “wait and see” rather than take large speculative positions.
However, the current scenario with a surge in futures trading volumes paints an opposite story. Futures trading volume reflects levels above mid-December highs, revealing renewed interest among Ethereum traders. This is because increased futures trading volume is “typically associated with increased use of leverage, hedging activity, and speculative positioning,” indicating that the market is preparing for a big move.
The reason for this surge could also be due to traders reacting to key technical levels or shifting expectations regarding short-term price movements of potential trend reversals. However, in the big picture, Ethereum price reacts to this activity as spot demand and derivatives activity adjust. Until such clear signs emerge, the market stands at a point of uncertainty.
ETH price overview
As of this writing, Ethereum’s price is $3,292, which does not reflect any real growth from the previous day.
