A Surge in Ethereum Futures Open Interest Points to a Huge Rally

Short positions surge and a short squeeze is becoming more likely, while the Federal Reserve meets this week. It is expected to cut rates by 25 basis points further.

A surge in open interest for Ethereum futures suggests a massive rally is on the horizon. However, a closer examination reveals a buildup of short positions, increasing the likelihood of a short squeeze.

Meanwhile, the Federal Reserve is expected to cut rates by 25 basis points at their meeting this week. If Ethereum responds positively to the cut, as anticipated, it could propel the cryptocurrency further upwards.

According to crypto analyst Michaël van de Poppe, favorable conditions could drive Bitcoin into a range exceeding $90,000 to $100,000.

Moreover, van de Poppe highlights Ethereum's recent breakout from a descending trend, suggesting a potential trend reversal if buying pressure recovers. As ETH tests critical support levels, a bullish continuation seems likely in the presence of a strong macroeconomic backdrop.

On the other hand, Ethereum's supply continues to shrink as staking reaches new all-time highs and token reserves on exchanges hit record lows.

This withdrawal of exchange reserves could indicate an impending supply squeeze, as fewer tokens are available for trading on the exchange.

With higher rates of staking and coins moving off exchanges, the possibility of a supply-driven price increase becomes evident.

Overall, these indicators suggest a bullish outlook for Ethereum, with limited supply and potentially higher sustained long-term holding sentiment.