STHs hold steady, derivatives run hot – What’s next for Ethereum?
Key Takeaways
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Ethereum is at the edge of price discovery with record Open Interest. Strong FOMO could flip the script into a squeeze instead of a sell-off.
We’re only halfway through Q3, and Ethereum [ETH] has already logged its strongest quarterly performance on record, delivering gains north of 90%. That’s a decisive win for short-term holders (STHs).
Meanwhile, with price sitting just 3% below price discovery, long-term holders (LTHs) are also seeing their cost basis reclaimed as Ethereum revisits its 2021 highs.
All in all, market sentiment is firmly in FOMO territory. And according to AMBCrypto, this kind of risk-on setup could be exactly what ETH needs to kick off its next leg higher.
Leveraged bets heating up as Ethereum eyes breakout
Over $3 billion has flowed into Ethereum via spot ETFs this week alone. This signals strong accumulation around the $4,200 zone, pushing prices up 12% over the same period.
And yet, ETH’s Futures volume bubble was at 0.32%, at press time, signaling above-average leveraged activity. Spot volume, meanwhile, sat at 0.21%, reflecting solid but comparatively subdued spot market participation.
Supporting this, Glassnode data showed that ETH Futures Open Interest (OI) reached a new all-time high of $35.5 billion as spot prices approached $4,590.
This reflects heavy derivative positioning alongside ongoing spot demand.
Source: Glassnode
Put simply, even though spot demand is heating up with bids stacked on the orderbook, derivatives activity is running even hotter. This kind of risk-on setup often sets the stage for volatility if spot demand eases.
In June’s retracement, ETH Futures OI peaked above $20 billion, but spot demand fell, with the spot bubble dropping to 0.03% while futures stayed hot at 0.23%.
That’s where FOMO comes into play. If Ethereum can’t hold key resistance levels, a similar deleveraging phase could follow, making the spot volume bubble a key metric to watch.
Behavioral divergence: The key differentiator
As Ethereum nears price discovery, greed is dialed up. Traders are cautious about a pullback eating into gains.
Normally, short-term holders (STHs) would dump positions fast, especially with 90%+ quarterly ROI. However, this cycle exhibits a clear behavioral divergence.
STH NUPL, which usually dives negative during retracements, has flipped above 0.35, turning yellow for the first time since 2021. This points to STHs staying put, letting FOMO dominate over usual sell-side pressure.
Source: Glassnode
Why it matters: ETH’s OI is maxed and leverage is dialed up, so even a small sentiment wobble could trigger a volatility spike. Yet, with the market still short of full euphoria, pullbacks remain absorbable.
In short, FOMO is running the show. STHs are bracing for bigger gains, maybe even triple-digit.
That makes a June-style flush unlikely, with overheated derivatives signaling bullish fuel instead of red flags.
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