Ethereum Leverage Imbalance Hits Record High as Price Falls

Ethereum's price has plummeted to a 12-month low, with investors watching closely for signs of recovery. According to recent data from CryptoQuant, the estimated leverage balance of Ethereum crypto has pushed to historic highs, indicating potential volatility risks.

This unusual surge in leverage appetite amid falling prices raises concerns about potential liquidation risks. Elevated open interest often signals more directional bets, leading to heavy liquidations. However, in this case, the ETH price has crashed without significant liquidation events.

The highest daily ETH liquidation event this week was on June 2, with approximately $411 million in ETH being liquidated. This suggests that traders on leverage may have been mostly short sellers or adding liquidity to avoid margin calls.