The winter of 2022 appears to be one of the most bearish in cryptocurrency history. This has caused the entire cryptocurrency market to drop more than 50% in value since the beginning of the year. Also, the situation in the cryptocurrency market has worsened with the collapse of the Terra-LUNA ecosystem.
However, the cryptocurrency market is recovering slightly from the shock it experienced in the first half of the year. Bitcoin price is suddenly rising despite its instability and weekly fluctuations.
According to data from glassPositive progress, a leading blockchain analytics firm, is making positive progress in crypto derivatives. Bitcoin and Ethereum derivatives are gaining increasing interest from investors with increased trading of BTC futures and top ETH holders.
The record from Glassnode indicates that the Bitcoin derivatives market has a slight directional bias. This means that investing in the market comes with more caution by investors. But on the Ethereum side, there is evidence of investor optimism.
The network registers more requests for ETH for fewer wallet withdrawals. These aggregate events for Ethereum could be due to the upcoming merger.
According to Glassnode’s (BTC) future open interest metric, investors seem to have more confidence in the derivatives market. They put aside the events and fear that came with the collapse of the Terra-LUNA tokens. The effect of the mining capitulation in May and June is also gradually fading away.
Glassnode noted the increasing stability in futures trading volume. He noted that the past 12 months of heavy selling since May 2021 constituted a structural decline in trade volume. However, it looks like they’ll be back as they boast $33 a day.
Also, the futures markets have gone through a structural change over the past year and a half. This was at the beginning of 2021, when the price of Bitcoin was in an uptrend. The underlying spread was stable even with high leverage.
A surge in open interest on Ethereum from Bitcoin
At the moment, Ethereum derivatives are getting more interest from investors than Bitcoin. This appears to be the first time in the history of cryptocurrency to experience such a shift between two leading assets. While Ethereum derivatives register about $6.6 billion in ETH, Bitcoin derivatives stand at $4.8 billion in BTC.
Additionally, the game envisions Ethereum Open Interest options almost reaching ATH as of November 2021. This was when the value of Ether reached $4,900.
The most plausible explanation for the price increase is the impact of the upcoming Ethereum merger. Most investors make bullish bets on prices between $2,200 and $5,000.
Featured image from BBC, chart from TradingView.com