Ethereum has entered a volatile phase after reaching a multi-year high near $4,790, retracing sharply to the $4,200 level. The correction represents an 11% decline in just a few days, shaking out overleveraged positions and fueling debates among analysts about ETH’s next move. Related Reading: Ethereum Demand Grows As ETFs Break Records With $2.85B Weekly Inflow Some market watchers warn that Ethereum could face a deeper pullback if the $4,200 level fails to hold as support. A breach here could send ETH lower, with traders eyeing the $3,900–$4,000 zone as the next major demand area. This cautious perspective highlights that momentum may be fading after the strong parabolic rally since mid-July. However, a different narrative is emerging. Many analysts argue that Ethereum has already flushed out excess leverage during this drawdown, setting the stage for renewed strength. With demand from institutional flows, strong ETH ETF inflows, and continued whale accumulation, bullish voices believe ETH is preparing for another leg higher — potentially toward new all-time highs above $4,900. Ethereum Grabs Liquidity At Key Price Level Top analyst Ted Pillows recently shared Ethereum’s liquidity heatmap, highlighting the $4,350 zone as a critical level where major liquidity was taken. According to Pillows, this move will determine whether Ethereum can stabilize and build a stronger base for its next rally. He poses the essential question: Will $4,350 be enough for ETH to hold? In the short term, the $4,350 zone now acts as an important pivot. If ETH maintains this level, it could serve as a launchpad for another push toward $4,800 and eventually beyond $5,000. However, a failure to hold could see price retest deeper supports near $4,000, which would prolong consolidation before any further breakout. Supply on exchanges is declining, signaling strong accumulation and reduced selling pressure. Institutional adoption is rising, with ETFs attracting record inflows and major companies adding ETH to their treasury strategies. Regulatory clarity in the US has improved, easing concerns for large-scale investors and legitimizing ETH as a core asset. With these drivers in place, Pillows and many others believe that Ethereum is on a clear path to set new all-time highs above $5,000, once the current volatility settles. The market may be turbulent in the coming weeks, but the broader trajectory still points higher. Related Reading: Bitcoin 30-Day CDD Down: Market Absorbs LTH Selling Without Breaking Support Weekly Chart Analysis: Consolidation Below Resistance Ethereum’s weekly chart shows a decisive pullback after touching $4,790, with the price now retracing to around $4,270. The move represents an 11% decline from the recent peak but comes after an explosive rally that pushed ETH above long-term moving averages, highlighting a shift in market momentum. The 50-week moving average sits at $2,811, while the 100-week and 200-week averages are clustered near $2,788 and $2,443, respectively. ETH’s distance above these levels reflects strong bullish momentum, as the asset remains well supported by its higher trend structure. Historically, when Ethereum trades significantly above these averages, corrections tend to be part of a healthy consolidation before resuming upward movement. Related Reading: Ethereum On-Chain Volume Soars To $13 Billion, Approaching Historic Records Long-term investors may interpret the retracement as a reset of overextended conditions, potentially preparing ETH for another leg higher. If Ethereum stabilizes here, a retest of $4,790 and eventual breakout toward new all-time highs above $5,000 remains a plausible scenario in the coming months. Featured image from Dall-E, chart from TradingView
Ethereum is holding firm above the $3,500 level, a key support reclaimed last Friday, signaling renewed strength in the market. After surging over 70% since late June, ETH appears to have entered a new bullish phase driven by rising demand and institutional interest. The momentum has shifted clearly in favor of the bulls, with technical structure and price action aligning to support further upside. Related Reading: Bitcoin Miner Sales Surge To Highest Level Since April – Details Adding to the bullish outlook, CryptoQuant data shows that Ethereum open interest has reached an all-time high, pointing to growing trader activity and rising capital in ETH derivatives markets. This surge in open interest often precedes large price movements, suggesting that Ethereum could see heightened volatility and expansion in the coming days. The combination of sustained price levels, strong trend continuation, and increasing participation sets the stage for a potentially explosive move. If bulls can maintain control above $3,500, Ethereum could be gearing up for a fresh leg higher in the short term. As the market awaits confirmation, all eyes are on ETH to see whether this momentum can drive it toward new 2025 highs. The coming week could prove pivotal for Ethereum’s medium-term trend. Ethereum Open Interest Hits Record ATH Ethereum’s market setup continues to strengthen, with open interest in ETH derivatives reaching a new all-time high of $50 billion, according to CryptoQuant data shared by analyst Ted Pillows. “Buckle up and enjoy the Ethereum ride,” Pillows stated, highlighting the elevated volatility ahead as a potential springboard for aggressive price action. This level of open interest is historically significant and often signals that large players are positioning for a major move. Such a dramatic increase in capital committed to ETH futures and options suggests rising investor confidence and heightened anticipation of directional momentum. While high open interest can lead to either a sharp rally or a correction, current on-chain and macro fundamentals indicate that the market may be leaning bullish. Ethereum’s network growth remains steady, with rising active addresses, validator participation, and increased activity on Layer 2s. More importantly, the recent passage of the GENIUS Act in the US provides legal clarity for stablecoins and lays the foundation for broader crypto regulation, benefiting Ethereum directly as the base layer for DeFi and real-world asset tokenization. Related Reading: Coinbase Premium Signals Aggressive Ethereum Accumulation: Institutional Demand Accelerates ETH Breaks Out With Eyes On Key Resistance Ethereum (ETH) has confirmed a powerful breakout above the psychological $3,500 level, closing at $3,588.26 on the 3-day chart. The move follows a strong rally from late June lows, with the price now up over 70% in less than a month. Importantly, ETH has broken past all major moving averages, including the 50, 100, and 200 SMAs, signaling a shift toward bullish momentum across longer timeframes. Volume has increased significantly during this breakout, reinforcing the strength of the move. The next major resistance lies at $3,742.95, a level that previously acted as a local top earlier in the year. A successful close above this mark could open the door for a retest of the $4,000–$4,200 range. Related Reading: Satoshi-Era Bitcoin Now For Sale: Galaxy Digital Sends 1,500 BTC To Binance On the downside, $2,852.16 now serves as a key support level. This level marked previous consolidation and breakout, aligning with the confluence of former resistance and the 200-day moving average. Holding above this zone is critical to maintain the current bullish structure. Featured image from Dall-E, chart from TradingView
Ethereum has regained strong bullish momentum over the past few days, rising more than 23% since June 22 and reclaiming the critical $2,600 level. After weeks of uncertainty and sideways movement, ETH is showing signs of strength, with bulls now eyeing a push toward the $2,700 resistance zone. A successful reclaim of this level could open the doors for a broader rally, potentially reigniting hopes for the long-awaited altseason. Related Reading: Tron DeFi Activity Expands: SunSwap Hits $3B+ Monthly Swaps In 2025 While volatility remains in the broader market, Ethereum’s recovery has been notable, especially as macroeconomic sentiment improves and risk appetite increases across both equities and crypto. The surge in price has brought renewed attention to ETH’s long-term outlook, with top analyst Ted Pillows stating that “ETH is looking good and going above $10,000 this cycle.” This bold projection reflects growing confidence among market participants that Ethereum still holds major upside potential, particularly as network fundamentals strengthen and institutional interest grows. With the $2,700 level acting as the next critical resistance, all eyes are on whether Ethereum can maintain its momentum and set the stage for the next leg higher. The coming days will be essential in confirming whether this rally has staying power or remains short-lived. Ethereum Faces Critical Test As Altcoin Market Watches Closely After a week of volatility, Ethereum surged 9% yesterday, pushing closer to the top of its long-standing range and signaling the potential for a major breakout. Trading between $2,200 and $2,800 since early May, ETH has now returned to the upper end of this consolidation zone. Market participants believe this could be the turning point, not just for Ethereum, but for the entire altcoin market. Ethereum remains the backbone of the altcoin ecosystem, and its price action has historically dictated the momentum of the broader crypto space. A decisive move above $2,800 could trigger a wave of breakouts across major altcoins, many of which remain suppressed under key resistance levels. While short-term volatility remains a concern, analysts argue that Ethereum is showing strong signs of resilience and accumulation. Ted Pillows shared his technical perspective, urging traders to stay focused on the bigger picture: “Don’t let short-term volatility scare you.” According to him, Ethereum will surpass $10,000 this cycle. His view reflects growing confidence among experienced investors who see Ethereum’s current structure as a launchpad for the next expansion phase. With Ethereum at a critical technical juncture and altcoins waiting for confirmation, the coming days could be pivotal. A breakout above $2,800 would validate growing bullish sentiment and potentially spark the long-anticipated altseason. Related Reading: Bitcoin Bounces Off Key Demand Level – Price Discovery On The Menu? ETH Tests 200-Day MA After Breakout Ethereum is showing renewed strength after reclaiming the $2,600 level and closing above all major moving averages on the daily chart. As seen in the image, ETH surged through the 100-day and 200-day moving averages, which had been acting as dynamic resistance near $2,516. This marks a significant technical milestone, indicating bullish momentum may be returning. The breakout candle is backed by rising volume, a positive sign that the move is supported by real market participation. If ETH can hold above the 200-day MA, the next critical level to watch is $2,700 — the top of the range that has held since early May. A decisive close above $2,700 would open the door for further gains, potentially testing the $2,900–$3,000 resistance zone. Related Reading: Solana Hits New Milestone: Wallets Holding 0.1+ SOL Reach Record High Support remains near the $2,500 level, where the 50-day and 100-day MAs converge, offering a strong confluence zone should any pullback occur. If bulls can maintain momentum and hold above the moving average cluster, the odds of a larger trend reversal increase. Ethereum’s current setup appears constructive, and market participants are closely watching for continuation, especially as macro sentiment improves and altcoin strength begins to return. Featured image from Dall-E, chart from TradingView
Ethereum is trading just below the $2,500 mark, struggling to reclaim higher ground as bearish momentum picks up across the broader crypto market. After repeated failed attempts to break past resistance, ETH now sits under heavy selling pressure, raising concerns about a deeper correction. Bulls appear to be losing control as overall market sentiment weakens amid global economic uncertainty and the persistent weight of rising US Treasury yields. Some market participants are now bracing for a significant downturn if Ethereum fails to hold above key demand zones. Related Reading: Solana Reclaims Key Support After Sweeping Lows – Early Signs Of Reversal? However, not everyone is turning bearish. Some prominent analysts maintain a highly bullish long-term view, arguing that Ethereum still has significant upside this cycle. According to Ted Pillows, Ethereum could reach $10,000 before the cycle ends. From his perspective, current price action represents a temporary dip rather than a trend reversal, and accumulating during weakness is the smarter move for long-term investors. While short-term uncertainty dominates headlines, long-term conviction remains strong among Ethereum supporters who point to rising institutional interest, declining exchange supply, and the overall maturing of the Ethereum ecosystem as reasons to stay optimistic. For now, ETH’s position just under $2,500 sets the stage for a critical test in the days ahead. Ethereum Analysts Eye Breakout Potential Ethereum is currently testing a crucial support level at $2,500 after repeatedly reaching the $2,700 resistance over the past few weeks. This zone has proven difficult to break, but bulls are still holding the line. If ETH manages to reclaim the upper range and close above it, analysts believe it could ignite the altseason the market has been waiting for. Despite Ethereum’s underperformance over the past year, marked by a lack of sustained momentum and significant selling pressure, the recent price action suggests a shift. Over the past few weeks, ETH has entered a more bullish phase, supported by increasing on-chain activity and stronger demand. Some analysts remain firmly bullish. Ted Pillows, for example, has projected that Ethereum is headed above $10,000 this cycle. While short-term volatility may cause concern, long-term conviction remains strong. For many investors, the message is clear: embrace the dips, accumulate strategically, and avoid panic selling. Technical sentiment across the board is turning cautiously optimistic. Market watchers point to Ethereum’s resilience at the $2,500 level as a sign of building strength. If this support holds and bulls step in with volume, the breakout above $2,700 could be swift and aggressive. Related Reading: Ethereum Pulls Back 10% But Holds Monthly Gains – Is The Next Pump Loading? ETH Tests Key Support As Bulls Defend $2,500 Ethereum is currently trading around $2,488 after a 2% daily drop, showing continued weakness below the crucial $2,700 resistance zone. The chart highlights a clear consolidation range forming since early May, with ETH repeatedly failing to close above the 200-day SMA, currently around $2,680. This long-term moving average is acting as a significant barrier, preventing any breakout momentum from gaining traction. Support remains at the lower boundary of the range near $2,470–$2,500, where buyers have consistently stepped in to absorb selling pressure. This area coincides with the 34-day EMA at $2,386 and the 100-day SMA just below current levels, forming a dense cluster of technical support. However, volume has been declining, suggesting that neither bulls nor bears have clear control. If Ethereum loses the $2,470 level decisively, the next key area to watch lies near $2,300, where the 50-day SMA could act as a cushion. Related Reading: Solana Flashes Buy Signal – $159 Support Key For Rebound Conversely, reclaiming $2,700 with strength could signal the beginning of a larger move to the upside. Until then, ETH remains stuck in a range, and traders will be watching closely for a decisive break—up or down to define Ethereum’s next major trend. Featured image from Dall-E, chart from TradingView
Ethereum is holding strong above the $2,500 mark after a volatile two-week stretch marked by heavy resistance and indecisive price action. While bulls have successfully defended key support levels, ETH continues to struggle against the supply wall just below $2,800. The broader crypto market mirrors this sideways trend, with Bitcoin and total market cap also trapped within tight ranges, limiting bullish momentum across the board. Related Reading: Chainlink Struggles At Key Resistance Level – $10 Support Back In Focus Analysts are growing optimistic about the potential for an altseason — but only if Ethereum can convincingly reclaim the $3,000 level. A decisive breakout above that mark would signal renewed strength and likely spark a broader rally in altcoins, many of which have lagged behind in recent weeks. Top analyst Daan shared a technical breakdown, noting that Ethereum’s price action has been volatile over the past two weeks. He emphasized that ETH is currently range-bound, much like BTC and the rest of the crypto market. Until there’s a clear breakout from this local structure, traders remain cautious. Ethereum Bulls Hold Structure But Momentum Cools Ethereum bulls gained traction earlier this month when the price surged above the $2,200 level with ease, establishing a bullish structure for the first time in weeks. Momentum accelerated quickly, with ETH breaking through $2,550 on Sunday before retracing just as fast into the $2,400 zone. The rapid up-and-down action highlights the current uncertainty in the market, where investors remain cautious despite recent strength. The Sunday pullback added weight to analyst warnings that Ethereum could face short-term selling pressure before confirming the next leg up. While many remain bullish on ETH’s medium-term trajectory, they acknowledge that momentum has cooled and the market is pausing to reassess. Daan provided insights into Ethereum’s behavior, describing the price action as “pretty messy” over the past two weeks. He pointed out that ETH, like Bitcoin and the broader crypto market cap, is currently trapped in a tight range. According to Daan, he’s “not looking to do much until we at least convincingly break out of this local range.” The defined range sits between $2,100 (key support) and $2,800 (major resistance). If Ethereum holds above current levels and pushes past $2,800, it could trigger a fresh wave of bullish momentum. Until then, consolidation may persist. Related Reading: Ethereum Flashes Golden Cross Signal – Can Bulls Push ETH To $3,000? ETH Consolidates Below Resistance As Bulls Hold The Line Ethereum (ETH) is currently trading at $2,539 after a volatile week marked by strong bullish attempts and growing resistance pressure. The daily chart shows ETH attempting to hold above the 200-day EMA ($2,440.71), which has now turned into a short-term support zone. Meanwhile, the 200-day SMA sits higher at $2,701.31, acting as a key resistance level Ethereum must overcome to confirm a sustained rally. After a sharp rally in early May that propelled ETH from under $2,000 to above $2,700, the price has entered a period of consolidation. This pause comes after multiple failed attempts to break and hold above the $2,700 resistance, just under the 200SMA. Volume has decreased, and the recent price action suggests a battle between bulls trying to defend the $2,500 level and bears pressing to cap upside moves. Related Reading: Cardano Whale Activity Spikes – 80 Million ADA Added In 48 Hours The bullish structure remains intact as long as ETH stays above the 200EMA and within the $2,400–$2,600 range. However, a failure to maintain current support could expose Ethereum to a deeper retracement toward $2,200. For bulls, reclaiming $2,700 is essential to unlock the next leg higher toward the psychological $3,000 level. Until then, traders should expect choppy price action and tightening volatility. Featured image from Dall-E, chart from TradingView
Experts say Bitcoin and Ethereum look increasingly attractive as macro tensions subside and volatility returns.
Data shows the Ethereum Open Interest has recently observed a sharp jump to a new all-time high (ATH) of around $16.8 billion. Ethereum Open Interest Has Shot Up Recently In a new post on X, CryptoQuant community analyst Maartunn has discussed about the latest trend in the Ethereum Open Interest. The “Open Interest” here is an indicator that keeps track of the total amount of ETH-related derivatives positions currently open on all centralized exchanges. Related Reading: Glassnode’s Bitcoin “Seller Exhaustion” Indicator Just Flashed A Signal: Bottom In? Below is the chart the analyst shared that shows this metric’s trend over the past week. The graph shows that the Ethereum Open Interest has observed a sharp increase over the past day. This means the investors have just opened many new positions on the derivatives market. Generally, the total amount of leverage in the market goes up whenever new positions pop up, so mass liquidation events can become more probable. A Mass liquidation event, popularly called a squeeze, can be a violent event where a large amount of liquidations occur simultaneously, feeding back into the price move that caused them. This provides more fuel for the move, which in turn causes even more liquidation. Ethereum has been rallying recently, so some speculative interest is normal, but the scale of the latest Open Interest increase may be concerning. The metric has increased by around 19% within a 24-hour span, reaching a new ATH of around $16.8 billion. As has often happened in history, this rapid growth in the Ethereum Open Interest could once again lead into volatility for the asset’s price. “This is guaranteed for heavy fireworks,” notes Maartunn. In theory, the volatility resulting from this increase in the indicator could take the asset in either direction. Still, since the rise has come alongside a rally in the ETH price, these positions will likely be long. Related Reading: Bitcoin Sentiment Cools Down From Extreme Greed: Can Rally Restart Now? And indeed, as an analyst pointed out in a CryptoQuant Quicktake post, the Ethereum Funding Rates have been positive recently, implying the long positions have been outweighing the short ones. Usually, a squeeze is more likely to affect the side of the market with more positions. As such, if the overheated derivatives market unwinds in a volatile storm, Ethereum may come out with a drawdown in the price. ETH Price At the time of writing, Ethereum is trading at around $3,500, up almost 7% over the last seven days. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
Data shows the Ethereum derivatives-related metrics have shot up recently, a sign that the price is at risk of going through a volatile storm. Ethereum Open Interest & Leverage Ratio Have Both Spiked Recently In a CryptoQuant Quicktake post, an analyst has discussed about the trend in the derivatives indicators of Ethereum. The metrics in […]
On-chain data shows derivatives exchanges have just received large Ethereum deposits, something that could lead to volatility in ETH’s price. Ethereum Exchange Netflow Has Seen A Sharp Positive Spike Recently As explained by an analyst in a CryptoQuant Quicktake post, the Exchange Netflow for ETH has registered a large spike recently. The “Exchange Netflow” here refers to an on-chain indicator that keeps track of the net amount of ETH moving into or out of the wallets associated with centralized exchanges. When the value of this metric is positive, it means the investors are depositing a net number of tokens to these platforms. How these transactions affect ETH depends on the exchange to which the holders are moving coins. Related Reading: Bitcoin Faces Threat Of Falling To $63,000 Despite Rising Odds For Trump’s Election Victory In the case of spot exchanges, investors usually make deposits whenever they want to sell, so positive exchange netflows to platforms of this type can lead to a bearish outcome. For derivatives exchanges, which are relevant platforms in the current discussion, the relationship with the price doesn’t tend to be so simple. Holders transfer their coins to these exchanges to open up fresh positions on the derivatives market. As new positions generally accompany some leverage, the overall risk in the sector could be assumed to go up when investors deposit to derivatives exchanges. This can lead to more volatility for the ETH price. A negative Exchange Netflow is usually bullish no matter the platforms involved, as it implies the investors are moving their coins to self-custodial wallets, potentially because they plan to hold into the long term. Now, here is a chart that shows the trend in the Ethereum Exchange Netflow for the derivatives platforms over the last few weeks: As displayed in the above graph, the Ethereum Exchange Netflow has seen a large spike into positive territory recently, which suggests the investors have just made large net deposits to the derivatives platforms. The holders have transferred about 82,000 ETH to these exchanges with this net inflow spree. As mentioned earlier, this trend can lead to higher volatility for ETH. Related Reading: Bitcoin Price Decline Worsens: Could It Be Setting Up for Major Reversal? It’s hard to say which direction any emerging volatility might take the cryptocurrency in, as other positive spikes in the last couple of months have proven to be a mixed bag. Given that the latest spike has coincided with a plunge in Ethereum’s price, though, a lot of these may be short positions predicting a further decline. If so, a swing to the upside could lead to liquidating these positions, which would add fuel to the rally. ETH Price At the time of writing, Ethereum is trading at around $2,400, down almost 7% over the last week. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
Regardless of both their maturity in the market, Bitcoin and Ethereum rivalry persists. According to recent insights from QCP Capital, a global digital asset trading firm and market maker, Ethereum appears to have now shown potential for larger price fluctuations compared to Bitcoin. QCP reveals that the volatility premium between these two major cryptocurrencies has seen a notable increase, with Ethereum leading in potential price swings. ETH to see Larger Price Swings than BTC Delving further into the insights shared, QCP Capital disclosed that it has observed Ethereum’s volatility premium over Bitcoin expanding to 8%, up from 4% just last week. This widening gap, according to QCP highlights a growing trend where Ethereum is expected to outpace Bitcoin in terms of price volatility. Particularly, the analysis suggests that Ethereum could offer more lucrative opportunities for those willing to capitalise on its market movements. Related Reading: Ethereum’s Breakout Moment: Here’s Why ETH Could Skyrocket to $15,000 Soon Furthermore, besides the impending surge in volatility, Ethereum’s market behaviour continues to diverge from that of Bitcoin, with its performance holding relatively steady even amid broader market shifts. Analysts from QCP Capital have pointed out that despite recent market uncertainties, including significant movements of Bitcoin by the US government, ETH has managed to sustain its market position more effectively than its counterpart. The analysts noted: ETH spot has performed relatively well compared to BTC following Trump’s speech, with ETHBTC gaining 5% since, despite its fourth consecutive day of spot ETF outflows. Why the strength in ETH? The market might be becoming immune to headline outflow figures due to the rotation from more expensive ETHE to the cheaper ETFs. They note that if the current trend of outflows from instruments like the Grayscale Ethereum Trust begins to slow, and inflows into Ethereum ETFs pick up, “could ETH break significantly higher?” Suggesting a trade idea, the QCP Capital analysts added: While we maintain a range-trading outlook for BTC as re-iterated yesterday, we favor accumulating ETH at its current discount, as volatility has picked up slightly. Ethereum and Bitcoin Market Performance While both Ethereum and Bitcoin have seen a negative performance in price over the past week, there remains a notable difference when being specific. For instance, over the past week, Bitcoin has decline by 1.4% however, Ethereum on the other hand has plunged 4.2% over the same period. Meanwhile, in the past 24 hours, Ethereum has seen an increase of 1.2% bringing its price to trade at $3,314 while Bitcoin still remains in the red down by 1.4% over the same period to trade at a price of $66,292, at the time of writing. Related Reading: Research Firm Predicts Bitcoin Game Theory In Global Adoption Race According to prominent crypto analyst Micheal Van De Poppe, the crucial level for ETH/BTC is 0.0515. If that price mark breaks, Van De Poppe predicts that then “it’s party time” as this would be the “strong first signs of the week.” For the first time, since the launch of the #Ethereum ETF, price rallied back upwards during U.S. hours. Crucial levels are 0.0515 BTC. If that breaks, it’s party time. Strong first signs of the week. pic.twitter.com/DysOtKMQpJ — Michaël van de Poppe (@CryptoMichNL) July 30, 2024 Featured image created with DALL-E, Chart from TradingView
Data shows the investors in the Ethereum derivatives market have been taking on very high leverage recently, something that could lead to volatility for the asset. Ethereum Estimated Leverage Ratio Has Been At Extreme Levels Recently As pointed out by an analyst in a CryptoQuant Quicktake post, the ETH Estimated Leverage Ratio has been on the up recently. The “Estimated Leverage Ratio” (ELR) refers to an indicator that keeps track of the ratio between the Ethereum Open Interest and Exchange Reserve. The former of these, the Open Interest, here is a measure of the total amount of derivatives positions related to ETH that are currently open on all centralized exchanges. The second metric, the Exchange Reserve, naturally tells us about the total number of tokens of the cryptocurrency that are sitting in wallets attached to all exchanges. Related Reading: This Bitcoin Metric Is “One Of Crypto’s Top Leading Indicators”: Santiment When the ELR’s value rises, it means that the Open Interest is increasing at a faster rate than the Exchange Reserve. Such a trend implies that investors are opting for a higher amount of leverage on average. On the other hand, a decline in the indicator suggests the derivatives market users are moving towards a lower amount of risk as they are deleveraging their positions. Now, here is a chart that shows the trend in the Ethereum ELR over the last few years: As displayed in the above graph, the Ethereum ELR has observed some steep growth recently. This sudden sharp uptrend in the asset came about as news around the spot exchange-traded funds (ETFs) gained traction in the buildup to the approval. The cryptocurrency’s price also registered a sharp rally during the same time. Thus, the conditions were perfect for attracting fresh speculation related to the coin, so it’s not surprising that the indicator’s value saw a spike. The rise has also continued beyond the approval of the ETFs, but the price has fallen to a sideways movement. It would appear that the investors are willing to take even higher risk despite this consolidation, trying to bet big on where Ethereum could escape from here. Historically, a high value of the leverage ratio has meant a higher volatility for the asset’s price. This is because mass liquidation events can become more probable to take place when the investors are sitting in overleveraged positions. Related Reading: How High Can Bitcoin Go Before A Top? Analyst Chimes In With ETH trading sideways recently and all these positions building up, it might take only one break in either direction before a lot of these positions come crashing down. A large number of such liquidations happening at once would only fuel further into the price move that caused them, thus amplifying it. It now remains to be seen how the Ethereum price develops in the coming days and if a volatile move is waiting for it given the trend in the ELR. ETH Price May has been a good time for Ethereum investors as the asset is looking to close the month with positive returns of more than 18%. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com