Ether breaks against BTC, but new highs depend on $4,700 consolidating as support #BNBATH900
Ether rose nearly 5% on Monday, but a true short-term trend reversal depends on $4,700 becoming support again.
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Ether rose 5% after a 'Monday Trap', but the risk of leverage is increasing with Binance's ELR at historical highs.
Flows of stablecoins of $1.65 billion and withdrawals of 208,000 ETH indicate strong accumulation.
ETH holding $4,700 keeps the door open for $5,000, while losing it brings the risk of a sharper correction.#BinanceHODLerDOLO
after overcoming the most recent 'Monday Trap', a recurring pattern where leveraged long positions suffer sharp liquidations at the beginning of the week. While ETH rose by up to 5% on Tuesday, BTC's return was limited to just 1%.
The data reveals that Monday has consistently recorded the highest liquidations of long positions, with peaks above 300,000 ETH during the drops in April and June. The pattern highlights how weekend optimism turns into losses when liquidity returns at the beginning of the week.
Despite the recovery, the ETH derivatives landscape signals overheating. Binance's Estimated Leverage Ratio (ELR) for ETH surged to a record 0.53, compared to just 0.09 in mid-2020.
The ELR tracks the ratio of open interest to exchange reserves, providing a measure of how intensely traders are utilizing leverage. Higher values suggest excessive optimism and greater risk of forced liquidations.
With ETH open interest hitting a new historical high of $70 billion on August 22, such extremes signal short-term risk, as excessive positions often precede strong deleveraging moves that wipe out traders before the next leg up.
