The Ethereum open interest has reached an all-time high in the days leading up to the Merge. The Merge has been scheduled to happen in mid-September, and the news is stirring up activity for the second-largest cryptocurrency by market capitalization.

Ethereum Open Interest retraces from ATH

A report by Kaiko has unveiled a retracement in open positions since the beginning of September. The open positions have dropped from 5.1 million ETH in open contracts to 4.7 million.

One of the crucial things to understand is that despite the decline, Ethereum is still in one of the biggest buildups of open positions seen in Ethereum’s perpetual futures. Ether is up by around 7% from its monthly lows recorded towards the end of August.

The data shows that the short positions that have also steadily increased may have been liquidated as more people continue to buy Ethereum. The Ethereum funding rates have also moved towards positive territory during the past few days, representing a rise from the low levels reported towards the end of last month.

This could show that the sentiment surrounding Ethereum as the Merge nears by future investors is improving. Investors are now less focused on hedging the pre-Merge risk and now have an optimistic overview of the successful completion of the Merge.

On the other hand, when comparing the Bitcoin funding rates, the sentiment surrounding Ether in perpetual futures markets appears to be more bearish as the crypto community awaits to see if the Merge will be a success.

Crypto winter continues

The cryptocurrency markets have recorded yet another week of losses. Bitcoin is finding it hard to hold the $20K levels. On the other hand, Ether has finally broken past $1600. Since mid-August, the two coins have been finding it hard to cross crucial resistance levels. The crypto market downturn comes amid the uncertainty in the cryptocurrency and traditional markets.

One of the factors creating uncertainty in financial markets is the energy crisis in Europe. Russia recently announced that it had shut down the Nord Stream pipeline indefinitely until the sanctions imposed against the country following the Ukraine invasion were lifted.

On the other hand, the European Central Bank could also trigger a further slump in the market. The institution will likely take a bearish approach in the upcoming meeting after the latest inflation data in Europe.

The crypto market is also suffering from its own piece of bad news. Michael Saylor, a Bitcoin maximalist and one of the largest investors in the crypto market, is facing a lawsuit in the District of Columbia over tax fraud.

Another post by Crypto Leaks has also alleged that there could be malicious dealings happening in the cryptocurrency sector. Ava Labs, the company behind the Avalanche blockchain, has been accused of paying the Roche Freedman law firm to sue its competitors. The news has further rocked a market that was already reeling from declining prices.


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