After a brief rebound at the start of the week, Bitcoin and Ethereum returned to price levels not seen in weeks, reinforcing the momentum of the upward movement. Amid this rebound, the top two crypto assets are showing steady growth beneath the surface.
Growing Leverage Collides With Bitcoin, Ethereum Rebound
Bitcoin and Ethereum prices have just moved into a bullish state and are demonstrating greater upside potential in the near term. The recent rebound in both assets faces a new level of complexity, as their Open Interest (OI) on cryptocurrency exchanges clearly observes.
Santiment, a popular market intelligence and data analytics platform, common this trend on the X platform, capturing the attention of investors across the market. At the time of the report’s release, Bitcoin price was already trading at $76,070 while ETH was trading at $2,395, marking their highest market value since early February.
This rebound is accompanied by a greater sense of optimism, with the rapid creation of margin and leveraged positions, as evidenced by the continued rise in their open interest. Even if the recovery in prices signals renewed optimism, the simultaneous situation increase in leveraged positions indicates more speculative activity behind the movement.
Interestingly, this type of pattern generally leads to a fragile environment, in which dynamics can quickly accelerate. However, they are also known to unravel just as quickly if sentiment begins to change.
According to the Santiment report, BTC open interest has seen an increase of over 59% over the past 7 weeks. The same goes for Ethereum Open Interestwhich obtained more than 45% during the same period. Santiment said the rise reflects growing conviction among traders. However, this can also lead to higher risk, as crowded leveraged trades can quickly unravel.
When open interest increases alongside prices, the market often becomes more volatile, with sudden pressure either way it becomes very likely. Currently, Sentiment highlighted that traders now feel confident enough to take increased risks.
BTC and ETH whales return to the market
Despite the observed volatility, wealthy holders are slowly returning to the market, which could reinforce the price rise. Santiment Data shows that the number of ETH wallet addresses holding at least 100,000 ETH increased from 54 to 57 over the past week.
The platform has predicted a level of correlation with price when this number of wallets increases. Furthermore, there are strong reasons to believe that the altcoin price will continue to rise. Large-scale investors or whales don’t sleep on Bitcoin either either.
Reports reveal that whale holdings between 1,000 and 10,000 BTC now hold over 4.25 million BTC, representing over 21.3% of the total BTC supply. Since mid-February, this is the largest number of coins held by the cohort. An addition of 27,652 BTC on Sunday equates to an accumulation of just over $2 billion as the leading crypto asset enjoys a rebound.
Featured image from iStock, chart from Tradingview.com
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