Since the Federal Reserve’s recent decision to lower interest rates by 50 basis points on Wednesday, Ethereum has demonstrated a robust performance compared to Bitcoin and other major cryptocurrencies within the top 20 by market capitalization. Over the past five days following the rate cut, Ethereum has surged more than 16%, while Bitcoin and Solana have reported gains of only 7% and 10%, respectively.
This upward momentum is further bolstered by a significant increase in Ethereum’s open interest (OI) over the past week. Open interest refers to the total number of unsettled long and short contracts in the derivatives market, indicating trader activity. As of now, Ethereum’s OI has exceeded $12.37 billion, nearing levels last observed prior to the market downturn in early August, according to data from Coinglass. The rise in open interest, alongside price appreciation, reflects growing confidence among investors.
Ethereum’s current rally comes after a prolonged period of underperformance relative to Bitcoin and Solana. The ETH/BTC trading ratio notably dipped to levels not seen since April 2021 earlier last week.
Analysts at Bitfinex commented in a report on Monday that Ethereum’s recent outperformance can be attributed to the “extreme depression in altcoin valuations and the increase in open interest noted since March 2024.” However, they cautioned that the uptick in open interest could lead to increased volatility in the altcoin market, with Ethereum at the forefront.
In a contrasting trend, Ethereum exchange-traded funds (ETFs) experienced net outflows totaling $28.5 million last week, despite finishing the week with some inflows, according to CoinShares data.
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