![Coinbase Aggressively Buys ETH Dip as Open Interest Plunge](https://cryptotale.org/wp-content/uploads/2024/08/Coinbase-Aggressively-Buys-ETH-Dip-as-Open-Interest-Plunge.jpg)
Coinbase has recently intensified its buying activity during a significant dip in Ethereum’s price, a move observed closely by market participants. This surge in buying comes as open interest (OI) in Ethereum futures witnessed a substantial decline, triggering discussions around potential market reversals.
In a recent post by CrediBULL Crypto, it was highlighted that Coinbase is buying the dip aggressively, with a notable reduction in open interest. The analyst emphasizes that the significant decrease in OI suggests a liquidation event or traders closing positions. This often creates an environment ripe for reversals. CrediBULL mentions taking profits on main shorts, advising a shift towards considering long positions in the current market conditions.
In another post, the analyst sheds light on the drastic drop in Ethereum’s open interest, describing it as “nuked.” The post also points out that funding rates are becoming increasingly negative. Negative funding rates indicate that short positions are paying long positions, which can be a sign of bearish sentiment. However, this scenario can often lead to a short squeeze, where short-sellers are forced to buy back their positions, leading to a price increase.
Bitcoin Dips Below $63K: Dogecoin and Ethereum StruggleThe aggressive buying by Coinbase, especially at the lows, is seen as a strong indicator of confidence in Ethereum’s potential for recovery. The combination of negative funding rates and heavy buying activity at lower prices suggests that some market players are positioning themselves for a possible bounce in Ethereum’s price.
Source: X
The chart accompanying CrediBULL Crypto’s posts further illustrates the situation. It shows a sharp decline in open interest, along with a notable dip in cumulative volume delta, which measures the difference between buy and sell orders. Additionally, the spot volume has also decreased, indicating a reduction in trading activity. As the market watches these developments, the focus is now on whether this aggressive buying will lead to a sustained reversal or if further declines are on the horizon.