Data shows the Ethereum Open Interest has shot up by more than 4% following the sharp move down in the cryptocurrency’s price.
Ethereum Has Seen A Pullback Over The Past Day
The cryptocurrency sector as a whole has witnessed a plunge to kick off the new month, with Bitcoin and Ethereum both being down by more than 5% over the last 24 hours. ETH is back in the low $2,800 levels, having essentially retraced the recovery that it had made during the last week of November.
The sudden price decline has unleashed a wave of liquidations on the derivatives exchanges, leading to $158 million in Ethereum-related contracts being flushed. Of these, $140 million of the liquidations involved long positions alone.
Below is a heatmap from CoinGlass that breaks down the liquidation numbers related to the various digital asset symbols.
Interestingly, while notable liquidations have occurred, derivatives investors still haven’t become discouraged.
ETH Open Interest Has Gone Up Since The Dip
As pointed out by CryptoQuant community analyst Maartunn in an X post, the Ethereum Open Interest has witnessed a sharp jump following the price decline. The “Open Interest” here refers to an indicator that measures the total amount of positions related to ETH that are currently open on all centralized derivatives platforms.
Here is the chart shared by Maartunn that shows the trend in this metric over the past couple of days:
As displayed in the above graph, the Ethereum Open Interest initially collapsed alongside the price drop as long positions suffered forceful closures. As ETH’s bearish momentum tapered off and the price settled into a sideways rhythm, however, the metric saw a gradual reversal in direction, indicating that speculators have started opening up fresh positions.
Since the dip, the ETH Open Interest has gone up by almost $654 million, equivalent to an increase of 4.3%. “Looks like the gamblers are back for another round,” noted the analyst.
Historically, a high value on the metric has generally been something that has led to volatility for the cryptocurrency. This is because an extreme amount of positions implies the presence of a high amount of leverage in the sector. In these conditions, any sharp swing in the asset can induce a large number of liquidations in the market. These liquidations only feed back into the price move that caused them, making it more intense.
An example of this pattern was already seen during the past day. With the Ethereum Open Interest now rising again, it remains to be seen whether more volatility will follow.
The People’s Bank of China (PBOC) has reaffirmed its commitment against cryptocurrency trading after confirming a resurgence in market speculation. The Chinese apex bank is nudging several government institutions to strengthen their crackdown on business and financial activities involving virtual currencies and curb related illegal operations.
Stablecoins Yet To Meet AML Requirements, China Says
In 2021, China issued a ban on all cryptocurrency trading and mining activities, citing a potential threat to the nation’s financial stability and energy control system. Prior to this policy, the Asian giant had been one of the fastest-growing crypto hubs with the highest mining activity in the world. Four years later, the PBOC has reiterated this hostile stance against virtual assets despite a significant increase in cryptocurrency adoption and regulation globally. This development came on November 28, 2025, in a meeting centered on “The Coordination Mechanism for Combating Cryptocurrency Trading Speculation.”
Notably, this policy discussion involved representatives from 13 government departments and agencies, including the Ministry of Justice, the State Financial Regulatory Commission, and the China Securities Regulatory Commission, among others. While the PBOC acknowledged the steadfast implementation of the government’s “Notice on Further Preventing and Handling Risks of Virtual Currency Trading and Speculation” issued in 2021, they also highlighted an increase in trading speculations and related illicit activities, requiring new methods for risk prevention and control.
In particular, the meeting reaffirmed that no form of cryptocurrencies qualifies as a legal tender, including stablecoins, which they claim still fail to satisfy certain regulatory requirements.
The statement read:
Virtual currency-related business activities constitute illegal financial activities. Stablecoins are a form of virtual currency, and currently cannot effectively meet requirements for customer identification and anti-money laundering, posing a risk of being used for illegal activities such as money laundering, fundraising fraud, and illegal cross-border fund transfers.
Moving forward, the People’s Bank of China admonished all concerned government institutions to bolster regulatory actions in enforcing the existing prohibitive policy on cryptocurrencies and all related criminal actions, in line with President Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era.
The directive read:
All units should deepen coordination and cooperation, improve regulatory policies and legal basis, focus on key links such as information flow and capital flow, strengthen information sharing, further enhance monitoring capabilities, severely crack down on illegal and criminal activities, protect the property safety of the people, and maintain the stability of the economic and financial order.
Crypto Market Overview
At the time of writing, the total market crypto cap stands at $3.06, reflecting a 0.12% gain in the last day. Meanwhile, total trading volume is down 32.95% to $81.28 billion.
With the rise of digital transactions and increasing e-commerce, consumers lost a great deal of privacy. Every transaction is logged by your bank, payment processor, and to whomever they sell your data. Different companies will have specific guidelines and policies when it comes to your data. Some promise a great deal of privacy, but the fact remains that your transactions are directly tied to your name, and you do not have full autonomy over your wealth.
The rise of Bitcoin
Cryptocurrency started with Bitcoin, which promised a decentralized digital currency. A transparent ‘ledger’ called the blockchain ensures that transactions are legitimate, by frequently cross reversing all transactions on the blockchain. This constant cross reversing is done by anyone who wants to participate. In return, they generate a small amount of Bitcoin, creating an incentive to ‘mine.’
The decentralized nature of Bitcoin made it an attractive option for those who are looking for privacy. It is easy to set up a Bitcoin wallet, which requires no personal information to start sending and receiving currency. For long term storage and increased safety, it is possible to use a cold wallet taking your Bitcoin offline, until you want to start transacting again.
For whom?
Financial censorship is an increasingly common phenomenon. There are but a few significant players in the payment processing world. We have seen these companies put payments on hold and ban users altogether. Mostly because of pressure by governments, but increasingly because of there own cultural and political goals and ideals.
The problem is not just with payment processors. Banks and service providers – such as Patreon – have terminated accounts for similar reasons. These banishments commonly target political and cultural dissidents.
Therefore, it is no surprise that these groups and individuals adopted Bitcoin and other cryptocurrencies. Even though it is not nearly as easy to donate and subscribe, cryptocurrency can be their life support. They also provided potential donors of controversial projects anonymity.
Privacy and Bitcoin
However, the open “ledger” in the Bitcoin blockchain has a substantial disadvantage: all wallets and transactions are public. Anyone can look up a wallet and see what is inside, monitor where the currency came from and went to from the moment it was mined. Open Source Intelligence (OSINT) tools such as Maltego can monitor and visualize this information, as shown below.
Hypothetically, ill-intentioned entities could link you to a specific Bitcoin address when you purchase the coins on a marketplace and when you declare an address publicly. Furthermore, one can follow these coins to their destination. Most marketplaces promise not to share your information with third parties, but there is no guarantee. In the case of a hack or a government raid, your transaction history could be reconstructed and used against you.
There are numerous methods of obfuscating your transactions on the blockchain, such as never reusing an address and coin controlling. However, these methods could still leave a trace. By using services such as tumblers, mixers, and coinjoins, you can gain more anonymization. However, these come with the risks of theft, seizures, and possible illegality due to anti-money laundering regulations.
Without going into more technical details, we can conclude that Bitcoin is an excellent option for those who want to avoid using banks and payment processors, although it has its flaws. Guaranteeing anonymization with Bitcoin requires quite a bit of technical knowledge and developed privacy practices, both online and offline.
Monero (XMR)
That is where Monero comes into the picture: the most popular cryptocurrency design for optimal privacy and information security. With features such as enforced privacy, ring confidential transaction, ‘bulletproofs,’ stealth addresses, and ring signatures.
These features combined make it that both the sending and receiving wallet in a transaction remain anonymous. Also, the transaction and wallet values are unknown to the public. Therefore, a hypothetical observer of a public address cannot reconstruct an incoming or outgoing transaction. That makes Monero the preferred option for those who want their transactions to be anonymous.
Now it should be noted that there are theoretical problems with Monero’s anonymization. Research shows that deanonymization is possible under the right conditions. However, these methods have not been recreated on a significant scale and are unlikely to be utilized by law enforcement. There is also a significant concern with the mining pool size, which could become a problem if an entity gains a majority share. Even though the Monero pool diversity has been improving, it is still far from optimal.
With the relative anonymity of cryptocurrency and user-friendly programs – such as Tor – making it easy to browse darknets we have seen an entirely new market surge. It is a large underground network benefiting from the decentralized nature of these tools. Marketplaces selling drugs and illicit services are commonplace, with the preferred currency being Bitcoin or Monero.
Law enforcement throughout the Western world has seen a sharp increase in online drug purchases in the last decade. In some countries, up to thirty percent of all drug purchases are online. On the Clearnet, vendors of grey market goods and services have taken a liking to cryptocurrency as well, because of oversight and no involuntary refund in the case of a dispute with a customer.
Malicious software that encrypts your data – and then offers a decryption key in exchange for cryptocurrency (ransomware) – has also become more prevalent. The anonymous nature of these transactions and the relative ease of purchasing cryptocurrencies made it profitable.
Towards widespread adoption
The rise of cryptocurrencies and their relative ease of use, decentralized nature, and anonymization have created many new possibilities. That includes individuals who want to store and trade wealth outside of centralized banking and for organizations that continue to receive funds after they are financially blacklisted. It also safeguards the anonymity of members of such organizations.
But with anonymity comes crime, and alongside the crypto speculators and visionaries, criminals have adopted crypto as their preferred currency. That has created entirely new markets and forms of exploitation.
Also, complex technology is rarely perfect: flaws and weaknesses are repeatedly theorized and patched. Concerning speculation, hype, and forks, cryptos are seldom stable and cannot provide the relative stability of gold or cash.
However, cryptocurrencies are exciting technologies that must be watched closely, as they have and will continue to provide new financial possibilities. Nevertheless, we are quite far away from widespread adoption.
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