"Ethereum, leverage liquidations during correction…sharp drop in open interest"

Minseung Kang

Summary

"A sharp drop in Ethereum (ETH) prices has resulted in a large decrease in open interest (OI) in the derivatives market."
"Amid observations that the largest-scale leverage liquidations since last year occurred, analysis suggests this helped ease market overheating."
"Coin Bureau forecasted that after shedding excessive leverage, the market could enter a new phase."

A sharp drop in Ethereum (ETH) prices has resulted in a large decrease in open interest (OI) in the derivatives market. Some market observers say this represents the largest-scale leverage liquidations since last year.

On the 26th, virtual asset (cryptocurrency) analyst Coin Bureau cited data from on-chain analytics firm CryptoQuant, saying, "Ethereum is experiencing the largest open interest reset since 2024." They explained that the recent ETH price decline forcibly liquidated heavy leveraged positions, serving as a catalyst to ease market overheating.

Coin Bureau also forecasted, "After shedding excessive leverage, the market could enter a new phase."

Open interest refers to contracts in derivatives such as futures and options that have not yet been settled. Generally, when its size increases, it is interpreted as capital flowing into the market; conversely, when it decreases, it shows existing positions are being liquidated and leverage is being unwound.

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