Daily open interest of ether futures on Binance and Bybit has reached an all-time high, according to The Block's Data Dashboard.

Data indicate that among the top five derivatives exchanges, all except the Chicago Mercantile Exchange (CME) have broken all-time highs in terms of daily ether futures open interest. For instance, open interest on Binance has surged to a peak of over $3.30 billion, while on Bybit, it has reached $1.94 billion. 

According to one analyst, the notable increase suggests a growing confidence and participation in ether futures trading, reflecting ether's attractiveness to those traders lured by bigger payoff potentials in more volatile markets. "The large increase in open interest in ether futures shows the elevated interest from risk traders in leveraged positions who look for higher volatility," YouHodler Chief of Markets Ruslan Lienkha told The Block.

Heightened ether price volatility

Lienkha pointed out that for the last two weeks, the average daily price fluctuation of ether was 2%, which was twice the average daily price movement of bitcoin. According to The Block's Data Dashboard, ether on-chain volume has also hit a multi-month high. The daily transaction volume on the Ethereum ETH -3.89% network has risen from a low of $1.26 billion at the beginning of October 2023 to a current multi-month high of $4.2 billion.

Lienkha said this increased activity is driven by price action. "Intraday traders definitely prefer ether, and as the bitcoin rally loses steam, and the volatility decreases, active traders are switching to ether," the YouHodler analyst added. 

Anticipation of spot ether ETFs

Anticipation over the possibility of spot ether ETF approvals this spring and the upcoming Dencun upgrade are also drivers of on-chain activity, Lienkha said. This viewpoint matches that of Nansen Principle Research Analyst Aurélie Barthere, who told The Block that "speculation around the possible approval of a spot ether ETF, and the Dencun upgrade were proving bullish for ether."

The Dencun upgrade will introduce features like blob transactions and transient storage. It enables the use of off-chain "data blobs" to incorporate more data into Ethereum transactions without impacting block processing times.

According to Lienkha, the possibility of a spot ether ETF and the Dencun upgrade are supporting continued bullish sentiment for the second largest digital asset by market capitalization. "With ether now above the $3,000 mark, many investors have seen this as a psychological level for the digital asset, which is likely stimulating further purchasing," the YouHodler analyst added.

In the past 24 hours, the price of ether held above the $3,000 mark, now trading at $3,153 at 1:04 p.m. ET, according to The Block's Price Page. The GM 30 Index, representing a selection of the top 30 cryptocurrencies, has increased by 0.36% in the past 24 hours, now at 115.07.

The price of ether has increased by over 3% in the past 24 hours. Image: The Block.