Ethereum has outperformed Bitcoin for some time. Altcoins have grown so quickly that Bitcoin’s market cap is now about half, even though he is over five years younger. This outperformance continued throughout the bull market and now into the bear market. Ethereum has taken another step to overtake Bitcoin in yet another metric. It is the amount of open interest relative to assets.
Open Interest Flips Bitcoin
The new data from Glassnode is interesting development In terms of open interest for options on both Bitcoin and Ethereum. Bitcoin is not only the first cryptocurrency on the market, it is also the digital asset with the most interest from both retail and institutional investors. Therefore, it naturally dominated this indicator.
Ethereum quickly outperformed Bitcoin in this regard, with its open interest surged to $5.6 billion across all put and call options, accounting for a more than 47% increase over the last month. recovery has clearly helped its dominance.
Bitcoin, on the other hand, remains at normal levels with an open interest of $4.3 billion. This puts Ethereum above 30. Also, with call options above $2.6 billion and a put/call ratio of 0.26, Ethereum investors are showing their hands and are very bullish.
Ethereum Merge Increases Interest
The main cause behind the ETH price recovery was the upcoming Merge. After continued uncertainty over whether the upgrade will take place or be postponed, Ethereum developers have stepped forward to provide an estimated date for the merge.
ETH price falls below $1,600 | Source: ETHUSD on TradingView.com
Once the Sept. 19 date was announced, investors began increasing their holdings ahead of the merger. With the new moon approaching mergers, positive sentiment towards digital assets is on the rise. Given that it is arguably one of the biggest updates in cryptocurrency history, the positive sentiment from investors is understandable.
The Merge is also behind the growth of Ethereum open interest. Bullish sentiment corresponds to an upgrade finally coming next month. However, it is important to note that the merge will make all his staked ETH freely available for withdrawal. This could inject ETH supply into the market and cause the price to crash. By that point, it doesn’t matter how bullish the sentiment is, it matters whether there’s enough demand to absorb this new supply.
This raises the question of whether this will be another “buy the rumor, sell the news” event. One thing is certain, if Alonzo’s hard fork follows the same path as Cardano, ETH users should prepare for bear market prices.
Featured image from Coingape, chart from TradingView.com
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