The cryptocurrency market has witnessed a noteworthy surge in Ethereum (ETH) prices, sparking excitement among investors and traders alike. However, understanding the drivers behind this rally goes beyond simply looking at price charts. On-chain data and derivatives market insights provide crucial clues about market sentiment, capital flows, and trading activity. Michael Nadeau, founder of the respected on-chain research firm The DeFi Report, offers a deeper analysis. His findings suggest several key factors are fueling this ETH price surge: Firstly, **crypto leverage** has seen significant increases. Open interest in Ethereum futures and options contracts has surged by approximately 40% in recent days, indicating a rise in leveraged trading activity and capital flowing into the market. Leverage allows traders to control a larger position with a smaller amount of capital, but this comes at the risk of liquidation if prices move against them. However, this recent surge in open interest signals increased bullish conviction among traders seeking to benefit from the rising ETH price.