- Ethereum’s open interest increased simultaneously with its price as per on-chain data, as it crossed the $2300 level on Wednesday.
- Historical data showed that similar spikes in open interest coincided with strong price rallies in Ethereum, according to Santiment.
- It noted that BlackRock’s recent transfers, along with the rise in accumulation addresses, point to growing institutional and on-chain activity.
Ethereum (ETH) open interest rose sharply as ETH bounced back toward the $2,300 level on Wednesday, a level of derivative positioning seen last before the February pullback.
Santiment data showed that Ethereum open interest has been rising again this month after falling along with the price in February. Rising open interest has typically reflected increased participation and capital inflows into derivatives markets.
According to the analytics firm, a similar pattern was seen in early October of last year, when a large rise in open interest coincided with a large rise in ETH prices, which reached a cycle high. After that phase, both open interest and price went down. The most recent trend showed that open interest was rising again as ETH's price rose.
According to Santiment, this indicated that Ethereum entered a “leveraged equilibrium zone,” where both the price and the open interest were going up at the same time. There was immediate support between $2,200 and $2,300. If momentum stays steady, the current setup could lead to a breakout squeeze.
The move came after BlackRock expanded its Ethereum-focused offerings. Arkham data showed that BlackRock deposited 567 BTC, worth around $41.78 million, into Coinbase and transferred $52.4 million of ETH on Tuesday.
Ethereum was trading at $2,326, up by 0.5% over 24 hours. On Stocktwits, retail sentiment around ETH remained in ‘bullish’ territory, as chatter levels around it remained at ‘low’ levels over the past day.
BlackRock's New Ethereum ETFs Are Like ‘Silver Bullets’
Last week, BlackRock’s Head of Digital Assets, Robbie Mitchnick, highlighted the launch of the iShares Staked Ethereum Trust ETF (ETHB), which allowed investors to gain exposure to ETH while earning staking rewards.
Mitchnick told CNBC that Ethereum ETFs are popular among tech-savvy investors seeking yield. With staking added, they are now closer to the "silver bullet" simplicity that made Bitcoin ETFs so popular. A "silver bullet" is a simple, all-in-one investment vehicle that gives investors full exposure without any extra work
Whale Accumulation Increases
On-chain data also suggests growing accumulation trends. Last week, CryptoQuant analyst CW8900 noted that accumulation addresses on Ethereum increased by about 6.5 million ETH, indicating growing long-term holding behavior.
The analyst added that daily active addresses rose to around 1.1 million in February, which was the highest level since December 2022. Activity surged after ETH briefly dropped below $2,000, with active addresses jumping nearly 80% over the week.
“The increase in ETH active addresses indicates bullish market movements,” the analyst wrote in a QuickTake note, adding that the data suggests accumulation activity has recently intensified.
Read also: Citi No Longer Sees Bitcoin Hitting Record High This Year – Cuts Ethereum Outlook by Over $1,000
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