Ether's value continues to go up. Some analysts are saying that $3,000 is a good short-term target. It's going on at the same time as a fee bottleneck, network congestion and issues with miners. DeFi applications are getting a lot of attention. Ether's price has gone up by 200% this year. It reached an all-time high of $2,300 on April 13.
The high value resulted in more interest. Its open interest reached $8 billion. Some investors say derivatives usually get big corrections when they are liquidated. However, they can also be used as a hedge ore for arbitrage. The usual fees are for short-term market makers and pros who are looking for big yields.
The yields are usually from a cash and carry plan. They can be a risk or an opportunity. A big liquidation of up to 7% could be up to 6% of its volume. Ether's aggregate could go past $25 billion. The price could go in either direction. Analysts usually focus on the buying side of the impact. It's a bull market. The theory holds even if the behavior will lead to an extension of the current rally.
The longs demand leverage. If there is a 0.15% fee for eight hours, this is a total of 3.2% on the week. Whales will buy it on regular exchanges and short the futures. This practice is cash and carry, and it doesn't matter if markets go up or down. If left alone, the markets could normalize. When open interest keeps going up, it is a sign that the market is a healthy one. A healthy one invites more derivatives trading and is more appealing to large traders.
The new CME listing was a big milestone for the coin. The $8 billion of open interest is proof of this.The current rate of funding will self-adjust if people terminate their positions. The bull run does not have to end with liquidations in the amounts of billions of dollars. However, there is a risk of it happening. Those contracts could be used to drive up the value of Ether over the short-term.