Ethereum futures open interest surged by 50% in May as ETH surpassed the $2,000 mark.

This month saw a significant 50% increase in Ethereum futures open interest (OI), which rose from $20.77 billion on May 1 to $31.16 billion by May 15. This substantial growth in speculation came after Ethereum decisively surpassed the crucial $2,000 mark on May 8.

Prior to this breakout, Ethereum was confined below the $2,000 threshold for over two months, struggling to regain upward momentum following a broader market correction in March.

The correlation between price movements and futures activity indicates that the rise in open interest was more of a reaction to market changes rather than a predictive move. Traders seemed to increase their positions as Ethereum demonstrated strength above $2,000, betting on sustained bullish trends.

By May 13, spot prices had climbed to $2,700, further boosting bullish sentiment across spot exchanges. Despite this, the futures market absorbed most of the excitement, with open interest growth surpassing the rise in spot trading volume.

Exchanges like Binance and Bybit, which cater to retail traders, experienced notable inflows of positioning, while the CME, often viewed as representative of institutional trading activity, displayed a more subdued response, even reporting a 5% decline in open interest over the last day.

The surge in futures exposure, particularly amid relatively light spot buying, introduces an element of instability. A swift accumulation of open interest without consistent demand in the spot market can make the system susceptible to significant unwinding events.

Currently, Ethereum’s capacity to maintain the $2,000 level is crucial in determining whether the heightened futures positioning will facilitate further upward movement or set the stage for sudden liquidations.