Ethereum Name Service (ENS) Derivatives Market Heats Up, Price Prediction Targets 138% Rally

There has been a notable surge in activity in the Ethereum Name Service (ENS) derivatives market. ENS' open interest has skyrocketed since it cratered to a year-to-date (YTD) low of $26 million on May 19.

Interest in Ethereum Name Service (ENS) derivatives has surged, with open interest reaching $153 million, the highest since the token's launch. This marks a significant increase from the YTD low of $26 million on May 19.

As of now, ENS is trading at $31.49, making it the cryptocurrency asset with the highest gains in the past 24 hours.

With open interest indicating the number of outstanding derivative contracts, such as options or futures, that have not been settled, a spike usually denotes more traders entering new positions.

As ENS's open interest spikes, so has the altcoin's price, which has risen by more than 40% in the last seven days.

When open interest increases substantially alongside price movements, it often confirms the strength and continuation of the trend. For instance, in an uptrend, a spike in open interest suggests that new buyers are entering the market.

Moreover, positive funding rates across cryptocurrency exchanges for ENS indicate that these new market entrants are demanding long positions. At the time of writing, the token's funding rate is 0.01%.

Funding rates are a mechanism used in perpetual futures contracts to ensure an asset's contract price stays close to its spot price. When they are positive, it means more traders are buying the asset, expecting a price rally, than those buying and hoping for a decline.

At its current price, ENS trades at a level last observed in January 2022. In a recent post on Medium, crypto analyst Javon notes that the altcoin may soon witness a 138% rally toward the $76.12 price target.

However, this will occur only if the altcoin's price manages to stay above the breakout level without falling back below it, which would indicate strong support from ENS bulls and hint at the likelihood of a continued price rally.

In the meantime, if the current uptrend is maintained, ENS's next price point is $34.64.

On the other hand, if the token experiences a decline in market activity, this bullish projection will be invalidated, and its price will trend downward toward $30.94.

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