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Analysis: Binance's ETH open contracts priced in USD have halved compared to last year's peak, but the ETH pricing is close to its peak

CryptoQuant analyst BaykusCharts stated that Binance's Ethereum open interest is currently about 5.8 billion USD, which is about half of last summer's peak of over 12 billion USD. On the surface, this looks like large-scale deleveraging, but open interest is denominated in USD, and the ETH price has also dropped by about half during the same period. When converted to ETH, the current open interest is about 2.5 million ETH, close to the peak of about 2.5 million ETH. Therefore, the decline is primarily driven by price rather than traders closing their positions.In terms of funding rates, the significant positive premiums seen in early 2021 and early 2024 have disappeared. After experiencing several periods of negative funding rates this year, it is currently just slightly above zero, with both long and short positions not overly crowded, and longs are not paying significant premiums. Analysis suggests that there is still a large amount of leveraged ETH exposure in the market, but there is a lack of strong directional confidence. This limits the risk of a one-sided liquidation chain reaction, but it also means that any decisive breakthrough in either direction could accelerate quickly. The key signals are: a price increase and a sharp rise in funding rates indicate long crowding; a price decrease and an increase in open interest indicate a growth in short positions.
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