Analysis: Ethereum rally backed by leverage, spot inflows and short liquidations

Michael Nadeau, founder of on-chain research firm The DeFi Report, said on X that Ethereum (ETH) open interest has jumped about 40% in recent days as leveraged long positions have increased. ETH spot volume has also surged, rising from $4-6 billion to $15-18 billion per day, indicating strong capital inflows. He added that funding rates have climbed from 0.005% to 0.03%, reflecting bullish sentiment as traders are willing to pay a premium to stay long. Meanwhile, around $85 million in ETH shorts have been liquidated. Nadeau views this combination of leverage, inflows and short liquidations as a clear bullish signal for ETH.