Theta Network’s latest rally comes on the back of derivatives traders as its open interest hit a new all-time high.
Theta Network (THETA) reached an eight-month high of $3.17 late Saturday as its daily trading volume skyrocketed 440% to $680 million. The asset witnessed a mild correction earlier today and is trading at $2.95 at the time of writing. See below.
The token currently has a market cap of $2.78 billion, securing the 53rd spot among leading cryptocurrencies.
Theta Network is a layer-1 proof-of-stake blockchain providing infrastructure for multimedia and artificial intelligence use cases.
Data shows that its price surge brought a huge wave of derivatives traders. According to data provided by Santiment, open interest increased by 77% over the past day and reached an ATH of $84 million.
Theta chart
On the other hand, the funding rate aggregated from all exchanges declined from 0.03% to 0.009% as the asset’s price started to face correction, per data from Santiment.
The indicator shows that the number of traders betting on the price drop has increased. Consequently, high price volatility would be expected for the asset since any movements could potentially trigger increased liquidations.
Data from the market intelligence platform shows positive social sentiment and discussions around the blockchain have significantly increased over the last 30 days. This could raise the fear of missing out among investors.
Most notably, price rallies that emerge on the back of FOMO (fear of missing out) tend to be highly volatile due to the lack of major catalysts.
Theta Network was co-founded by Mitch Liu and Jieyi Long in 2017. Liu is a veteran in the video and gaming industries, who previously founded startups like Tapjoy and Gameview Studios.
IronSource purchased Tapjoy for $400 million.
Long is a specialist in blockchain, virtual reality and live-streaming.
Theta has attracted several high-profile investors and strategic partners from various industries, including Samsung, Sony, Digital Currency Group, Sierra Ventures and Heuristic Capital Partners.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
