Ethereum open interest, RSI hit multi-month high – Is $3,000 near?

Ethereum has reached an eight-week high as the RSI shows an increase in buying pressure.
The open interest at $14 billion shows increased market participation by derivative traders.

Ethereum [ETH] traded at an 8-week high of $2,735 at press time after a nearly 4% gain in 24 hours. According to CoinMarketCap, trading volumes has increased by more than 100%, showing rising market interest.

The gains saw ETH record the highest amount of short liquidations across the crypto market. At press time, more than $23 million worth of ETH short positions had been wiped out per Coinglass.

A high number of short liquidations is a bullish sign as it indicates that short sellers are turning into buyers to close their positions. A look at Ethereum’s one-day chart suggests that these bullish trends could continue.

Ethereum shows bullish signs

ETH flipped the 100-day Exponential Moving Average (EMA) at $2,685, as the uptrend gained strength. The uptrend later faced resistance as ETH approached the 200-day EMA.

The 200-day EMA, currently at around $2,800 is a psychological level for traders. If ETH makes a decisive break above this resistance, the altcoin will have entered a long-term bullish trend, which could see it rally towards the 1.618 Fibonacci level above $3,000.

Source: Tradingview

Technical indicators suggest that a break above the 200-day EMA is likely. The Chaikin Money Flow (CMF) has flipped positive for the first time in nearly two weeks showing that more capital is flowing into ETH.

Additionally, the Relative Strength Index (RSI) has been making higher highs and reached its highest level since June showing high buying pressure.

Source: Tradingview

Despite an influx of buyers, Ethereum’s RSI at 66 shows it is not overbought. This indicates that there is room for growth.

Open interest and leverage ratio spike

Ethereum’s open interest has increased to the highest level since August as data from Coinglass shows. This metric stood at $14 billion at press time signaling that a high number of market participants and capital is flowing into ETH.

Source: Coinglass

An increase in open interest is usually bullish if traders are opening long positions. However, this increase can also result in price volatility.

Ethereum’s estimated leverage ratio is approaching a three-month high suggesting that there is an influx of borrowed capital. If ETH makes sudden moves, it could result in a high number of forced liquidations causing volatility.

Source: CryptoQuant

Ethereum wallets in profits

Ethereum’s recent gains have also resulted in a spike in the wallets that are In The Money (in profits). At press time, 69% of all ETH addresses, were in profit, representing a 6% increase in the last seven days.