Ethereum prices unexpectedly crashed on May 24, sending the coin below last week’s lows towards the $1,800 psychological level.
Following this dump, on-chain data from Coinanalyze reveals that there has been a sharp drop in open interest, suggesting that some traders were caught unaware and had to exit their positions.
Ethereum’s Open Interest Dropping
On May 24, ETH’s open interest stood at $5.2 billion across all major cryptocurrency exchanges like Binance and OKX. Out of this, $4.7 billion were from perpetual futures, while less than $450 million from futures.
In cryptocurrency derivatives trading, open interest is the total number of open positions. These positions can be long or short and drawn from perpetual futures and futures of leading platforms.
Being derivatives, open interest positions are often leveraged, meaning the trader borrows funds from the exchange to trade a bigger lot…
