On-chain analytics firm Glassnode has reported that the Ethereum futures market remains overheated despite a significant long squeeze that occurred yesterday, August 10, 2023. This follows a period of high volatility for ETH, leading to substantial liquidations across various exchanges.
Glassnode highlighted a massive $76.4 million in ETH long liquidations, with $55.8 million wiped out in a single hour, marking the second-largest spike in a year. This event resulted in a notable deleveraging of the market, with Open Interest, a measure of total open futures positions, dropping from $20.5 billion to $15.9 billion. This represents a $4.6 billion decrease in positions.
However, despite this significant reduction, the Open Interest remains elevated, sitting 22% above its 365-day moving average of $13 billion. This suggests that leverage in the Ethereum futures market is still at elevated levels, potentially indicating further volatility for ETH in the near future.
Historically, overheated futures markets have often unwound with price volatility. While ETH experienced a crash to the $2,100 mark yesterday, it has since rebounded to around $2,800.