The Ethereum futures market is still showing signs of being overheated, despite a recent long squeeze that occurred. Glassnode, an on-chain analytics firm, has provided insights into the current state of the Ethereum futures market and how it has been impacted by recent market volatility.
In a recent post on X, Glassnode discussed the changes in the Ethereum futures market over the past day. With significant price volatility in the market, there has been a surge in liquidations on various exchanges. Long investors have been particularly affected by the recent price action, as evidenced by a chart showing a spike in long liquidations related to ETH over the past year.
According to Glassnode, $76.4 million in ETH long liquidations hit the market recently, with $55.8 million wiped out in a single hour. This represents the second-largest spike in long liquidations in a year, highlighting the impact of recent market volatility on long investors.
In addition to the surge in liquidations, the Open Interest in the Ethereum futures market has also seen a significant decrease. The Open Interest indicator tracks the total amount of Ethereum-related futures positions open on centralized derivatives exchanges. While the Open Interest was around $20.5 billion at the start of the month, it has since dropped to $15.9 billion after the recent liquidation event.
Despite the decrease in Open Interest, the market is still notably above the yearly average. The 365-day moving average of the Ethereum Open Interest is currently at $13 billion, indicating that the market is still at elevated levels of leverage. This suggests that the market may still be overheated, despite the recent liquidations that have occurred.
Historically, an overheated futures market has often led to increased volatility in the price of the underlying asset. Therefore, it is possible that we may see more sharp price action for ETH in the near future as the market works to cool down.
In terms of price, Ethereum experienced a crash to around $2,100 recently but has since rebounded to trade around $2,800. This price action reflects the volatility and uncertainty in the market, as investors navigate the current landscape of the Ethereum futures market.
Overall, the Ethereum futures market remains overheated despite recent liquidations, and investors should be prepared for continued volatility in the near future.