Ethereum News Today: Ethereum's Leverage Gamble: Bulls Test $4,400 or Face Deleveraging

Binance Futures data indicates a surge in bullish sentiment among traders, who are closely watching Ethereum (ETH) as it approaches potential all-time high (ATH) levels. Following a significant price rally on August 22, 2025, ETH reached $4,426 amid volatile trading conditions and a sharp correction from earlier highs near $4,800. The asset is now consolidating above the $4,400 level, a critical support zone that analysts say will determine the next phase of the market’s direction. The recent price action reflects the fragile nature of sentiment at key inflection points, with traders on both sides of the market expressing cautious optimism or concern over potential reversals [1].

Derivatives market activity on Binance has become a focal point for assessing risk exposure, particularly through the platform’s Estimated Leverage Ratio (ELR). According to analyst Darkfost, the ELR for ETH has reached 0.53, the highest level recorded in the history of the platform. This metric, which combines Open Interest and overall market activity, indicates the degree to which traders are relying on leveraged positions to amplify their exposure. The ELR has surged from 0.09 in July 2020 to a current level that signals extreme risk, as traders continue to push boundaries in pursuit of higher returns [1].

Open Interest on Binance reached an all-time high of $12.6 billion on August 22, reflecting unprecedented speculative activity in the Ethereum derivatives market. With derivatives volume now surpassing spot trading, leveraged positioning is playing an increasingly dominant role in short-term price movements. Analysts caution that such high leverage levels can amplify price swings, especially in the event of cascading liquidations. These risks are particularly pronounced given that ETH recently broke above its ATH, raising the probability of a deleveraging event in the coming days [1].

Technical indicators suggest that Ethereum is in a broader uptrend, but the immediate outlook remains precarious. The $4,400 region is considered a key support level where ETH is attempting to stabilize. A sustained hold above this threshold could allow bulls to regroup and push toward the $4,800–$5,000 resistance zone. Conversely, a breakdown below $4,400 could trigger a retest of lower-moving averages, such as the 100-day average at $4,350 and the 200-day average near $4,090. For traders, the coming days will be crucial in determining whether the bullish trend can continue or if Ethereum will face deeper retracements [1].

Despite the heightened risks associated with leveraged positions, long-term bullish sentiment remains intact, with many analysts viewing a potential correction as a necessary correction rather than a bearish reversal. Darkfost notes that while deleveraging events can temporarily push prices lower, they often act as a reset for the market. This could create the conditions for Ethereum to retest and potentially surpass the $5,000 level in the near future. Institutional and whale accumulation in ETH continues to support the broader narrative, even as short-term volatility remains a key challenge [1].

Source: [1] Ethereum Faces Risk As Binance Leverage Ratio Skyrockets To Record Levels (https://cryptorank.io/news/feed/227bf-ethereum-faces-risk-as-binance-leverage-ratio-skyrockets-to-record-levels)