VanEck Exec Counters Ethereum Critics as ETH CME Open Interest Hits Record $2.3B

VanEck Digital Assets Research Head Matthew Sigel counters critics who think Ethereum is dead amid surge in ETH CME Open Interest.

In latest Ethereum news today, ETH recently criticized for lagging behind other assets during the latest uptrend, has taken center stage. While its performance trailed several altcoins during the latest market surge, latest developments suggest a major change.

For context, between Nov. 5 and 12, Ethereum rose by 44%, reaching $3,447. However, this growth fell short compared to altcoins like XRP, which recorded much higher gains during the same period. 

Following its climb, Ethereum corrected sharply, dropping nearly 10% by November 14. Critics used this underperformance as fodder, some going as far as declaring Ethereum “dead.”

Despite this, Ethereum has displayed resilience in recent times. After six days of consolidation, it rebounded with a 9% intraday gain on Nov. 21 and appears to be the biggest beneficiary of the ongoing market recovery among the top 10 assets, with a 4.52% increase today.

Ethereum Witnesses Record Open Interest

Amid the rebound, Matthew Sigel, VanEck’s head of digital assets research and a long-time Ethereum advocate, pointed to major activity in Ethereum’s futures market. 

eTH iS dEAd pic.twitter.com/lz8CZkhV0L

— matthew sigel, recovering CFA (@matthew_sigel) November 26, 2024

According to his chart, Ethereum’s notional open interest on the Chicago Mercantile Exchange (CME) surged by 88% in three weeks, increasing from 350,950 ETH ($1.2 billion) on Nov. 4 to 662,600 ETH ($2.3 billion) on Nov. 22. He shared this data to counter the narrative that Ethereum is “dead.”

In response, finance lawyer Scott Johnsson disclosed that over $17 billion in net new USD stablecoins entered circulation in the past 30 days, with Ethereum accounting for over 97% of that change. 

Analysts Weigh In on Ethereum’s Future  

Meanwhile, CryptoWolf, a popular analyst, has remained bullish on Ethereum. Five days ago, he noted that Ethereum’s weekly chart is forming a massive triangle consolidation pattern, which has been compressing for three years. At the time, he projected a potential breakout targeting $20,000. 

However, in a recent follow-up post, he outlined his plan to stay bullish on Ethereum until mid-2025, aiming for $10,000 before shifting focus to the long-term target of $20,000 by the end of 2025.

Also, Michaël van de Poppe, a veteran analyst, expects Ethereum to hit $4,000 soon, as Bitcoin and altcoins consolidate before another surge. In a disclosure today, the analyst confirmed that he remains optimistic about Bitcoin reaching $100,000 this year, which could further benefit Ethereum.

#Bitcoin didn’t reach the area of interest, yet.

Just a period of consolidation taking place, through which you can see that #Altcoins are starting to fire off.

Nice stuff, I think we’ll still see $100K this year, but I think we’ll also see $ETH at $4,000. pic.twitter.com/yvtfR2y86o

— Michaël van de Poppe (@CryptoMichNL) November 27, 2024

Possible Bearish Signals

However, it is not all bullish for Ethereum. Amr Taha, recently observed a noteworthy trend in Ethereum’s derivative exchanges, citing data from market resource CryptoQuant. 

He highlighted two recent instances of significant inflows, with 42,000 ETH entering these platforms. Taha interpreted this as a signal of traders preparing for short positions as Ethereum nears its $3,500 resistance level. For context, ETH currently trades for $3,470, now eyeing $3,500.

In addition, Ethereum’s recent gains come amid challenges highlighted by CryptoQuant analyst Mac_D. He pointed out that Ethereum’s circulating velocity and transaction growth remain subdued. 

Current velocity, at seven times the total supply, lags behind historical patterns that marked previous rallies. The rise of faster and cheaper blockchain competitors like Solana and Tron further complicates Ethereum’s growth.

However, the market analyst acknowledged that Ethereum’s dominance as the second-largest cryptocurrency and a major collateral asset for institutional investors remains intact. 

Mac_D suggested that an increase in Ethereum’s price could stimulate lending and leverage in the DeFi space. In turn, this could trigger an altcoin season, supported by higher transaction volumes and network activity.