ETH rises 5% after the 'Monday Trap', but the risk of leverage increases sharply as ELR on Binance peaks, while spot flows and ETH withdrawals from exchanges indicate sustained accumulation.
Maintaining $4,700 opens up the opportunity to move towards $5,000, while losing this level easily triggers deeper corrections. Data from CryptoQuant and Coinglass reinforce the contradictory picture: derivatives are too hot, but real capital continues to flow in strongly.
MAIN CONTENT
ETH rises 5% after the 'Monday Trap', showing relative strength compared to BTC (+1%).
ELR ETH on Binance reaches a record 0.53, OI hits $70 billion, warning of short-term volatility.
Stablecoin inflow of $1.65 billion and withdrawal of 208,000 ETH reinforce the accumulation trend, but $4,700 remains a pivot point.
What is the Monday Trap?
This is a recurring pattern when leveraged long positions are heavily liquidated at the beginning of the week, often following a period of optimism over the weekend. CryptoQuant data shows that Mondays often have the highest long liquidations, with spikes exceeding 300,000 ETH during the drops in April and June.
This effect reflects liquidity returning early in the week, reversing the optimistic sentiment of the weekend. When the market is thinly liquid, high leverage is easily swept, triggering a chain of widespread liquidations. Capturing this rhythm helps investors mitigate FOMO before large capital returns.
Why did ETH rise 5% after the Monday Trap while BTC only rose 1%?
ETH shows relative strength by recovering about 5% on Tuesday, while BTC only about 1%. This indicates that capital is prioritizing ETH after the early-week leverage sweep.
In late-cycle phases, capital often shifts between layers of assets in crypto. The strong rebound of ETH immediately after liquidations suggests short-covering combined with new buying, especially when spot flows support. However, when derivatives are too hot, rapid increases can also be subject to early profit-taking.
How hot is leverage on ETH derivatives?
Very high: ELR ETH on Binance has risen to a record level of 0.53, compared to only 0.09 in mid-2020, according to CryptoQuant. At the same time, open interest (OI) ETH reached a historical peak of $70 billion on August 22, according to Coinglass.
ELR reflects the OI ratio on exchange reserves; the higher it is, the more it indicates the use of high leverage and liquidation risk. When OI peaks alongside an increase in ELR, adverse price movements can easily lead to 'forced liquidations' before a major trend continues.
What is ELR and why is it important?
ELR is the ratio of OI to exchange reserves, used to measure the level of systemic leverage. High values usually indicate bullish sentiment and are prone to shock volatility due to forced liquidations.
In the context of ETH, record ELR implies that traders are using significant leverage on exchanges. This does not negate the long-term uptrend but increases short-term risks, especially around key technical areas where stop orders are dense.
What does spot flow say about accumulation and selling pressure?
CryptoQuant data indicates that Binance recorded over $1.65 billion in stablecoin deposits in August, surpassing $1.5 billion for the second time this month. At the same time, nearly 208,000 ETH were withdrawn from Binance on August 24-25, equivalent to about $1 billion.
Stablecoin inflow reflects new liquidity ready to participate, while withdrawing ETH to cold wallets reduces selling supply on exchanges. This combination supports the medium to long-term accumulation scenario, although short-term fluctuations may still occur due to high leverage.
What significance does the $4,700 area hold for price structure?
This is a pivot point. ETH needs to reclaim the lows around $4,662 and close the daily candle above $4,700 to align the multi-timeframe structure, paving the way towards $5,000.
Previously, prices absorbed liquidity at the daily order block and tested the long-term support of $4,350, pushing the recovery to $4,579. However, sustainability is key: only with a clear daily close above $4,700 can the probability of extending the uptrend be reinforced.
How does the fair value gap (FVG) of $4,600–$4,450 impact?
FVG $4,600–$4,450 is the area where prices are 'filling' on the medium-term chart. If selling pressure persists, the risk of extending towards the $4,000 area may emerge.
When the FVG has not been invalidated, rebounds may lack sustainability due to insufficient liquidity. Closing above $4,700 will help invalidate the FVG, confirming that buyers are in control and providing a cushion for the move towards $5,000.
If $4,700 cannot be maintained, what scenarios are likely to occur?
Price may get 'stuck' in the range of $4,700–$4,350. Losing $4,350 will trigger deeper corrections, fitting seasonal patterns and the risk of market structure changes.
In this range, volatility is likely due to short-covering and re-selling at high levels. With high ELR, sweeps at both ends of the range may occur more frequently to 'wash out' positions before the main trend shapes up.
ETH is at a crossroads: which signals should be prioritized?
In the short term, leverage and record OI increase volatility risk. In the medium term, stablecoin inflow and ETH outflow from exchanges support accumulation.
Therefore, the $4,700 mark is crucial for solving the dilemma. Above $4,700 with a convincing daily close, the chance of reaching $5,000 increases. Conversely, fluctuations below $4,700 signal the need to be cautious of potential declines due to liquidations.
How should investors manage leverage risk during this period?
Prioritize controlling positions and keeping leverage low when ELR is high; monitor OI, funding, and volatility. Set clear stop-loss levels around technical pivots, avoiding averaging down when signs of widespread liquidations appear.
Combining spot flow with technical structure: if inflow is stable and the closing price is above $4,700, confidence may gradually increase. Conversely, consider defensive measures if the price falls below $4,700 and ELR/OI has not 'cooled down'.
Contradictory signals: how should it be read to maintain balance?
Overheated derivatives warn of risks, while spot accumulation strengthens the foundation. A balanced approach is to let the market confirm through the $4,700 mark and react to price around $4,350.
There's no need to rush to 'catch the top/bottom'. Waiting for confirmation helps reduce the risk of being 'trapped' in liquidity sweeps, especially when the Monday Trap and similar patterns continue to repeat periodically, according to CryptoQuant.
Detailed signal Implication Source Record ELR ELR ETH on Binance ~0.53 (vs 0.09 in mid-2020) High leverage, increased liquidation risk CryptoQuant OI peak Open interest ETH reached $70 billion on August 22 Risk of 'forced liquidation' before trend continues Coinglass Spot flow Stablecoin inflow $1.65 billion; withdrawal of 208,000 ETH (August 24-25) Accumulation, reducing selling pressure on exchanges CryptoQuant Technical pivot Close above $4,700, reclaiming the low around ~$4,662 Paving the way to $5,000 TradingView Risk area Range $4,700–$4,350; FVG $4,600–$4,450 Losing $4,350 easily leads to deeper corrections Technical analysis article, price data
Frequently Asked Questions
What is ELR and what does the level of 0.53 on Binance indicate?
ELR is the ratio of OI/exchange reserves. The level of 0.53 (record) indicates that leverage usage is very high, increasing volatility and liquidation risks. Source: CryptoQuant.
Why is the stablecoin inflow of $1.65 billion noteworthy?
This indicates new liquidity ready to enter. Real capital entering exchanges often precedes spot buying phases, supporting the accumulation trend. Source: CryptoQuant.
What does withdrawing 208,000 ETH from Binance mean?
This is a signal to transfer assets to long-term storage, reducing selling pressure on exchanges and supporting the accumulation trend. Recorded on August 24-25. Source: CryptoQuant.
Why is $4,700 a pivot point for ETH?
Closing above $4,700 and reclaiming the low around ~$4,662 helps align multi-timeframe structures, paving the way towards the $5,000 mark. Below $4,700, the risk of deeper corrections is high.
How does $70 billion OI affect risk?
High OI along with high ELR often makes the market susceptible to 'forced liquidations' before choosing a direction. Investors should reduce leverage and set clear stop-loss levels. Source: Coinglass.
Source: https://tintucbitcoin.com/ether-vuot-btc-47k-thanh-ho-tro/
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