Ethereum has experienced a notable surge, crossing the $3,500 mark for the first time since July 2024. Over the past week, this rally marks a renewed rise for the "king of altcoins," which had lost momentum after a strong start to November. However, while Ethereum's current price trajectory appears promising, caution is advised as on-chain indicators hint at a possible market pullback. A key indicator in this analysis is the ETH open interest, which recently reached a record high.

In a Quicktake post on the CryptoQuant platform, analyst ShayanBTC cautions that despite Ethereum’s bullish path, investors should remain vigilant.

This warning stems from a concerning divergence in ETH futures market metrics. Open interest, the total count of open futures or derivatives contracts involving Ethereum, currently stands at $17 billion. This surge often signifies changing investor sentiment, with increased speculation about potential market shifts.

ShayanBTC points out the discrepancy between soaring open interest and Ethereum's lack of a new all-time high. Such divergence could indicate looming volatility and the risk of significant liquidation cascades. Should Ethereum experience a sudden price drop or stabilization, excessive leverage among futures traders may lead to forced liquidations and sharp price declines.

Currently, Ethereum is priced just below $3,700, having risen over 3% in the past 24 hours, and nearly 8% in the last week, according to CoinGecko data.

Conversely, there is an optimistic counterbalance to this bearish outlook. On November 30, crypto analyst Ali Martinez noted substantial activity from Ethereum whales. Large investors holding between 100,000 and 1,000,000 ETH have acquired over 280,000 coins in the past four days, as revealed by CryptoQuant data. Such significant accumulation by influential investors could indicate a positive sentiment for Ethereum's future performance.