ETH derivatives market shows signs of overheating, analysis finds

The ETH derivatives market is showing signs of overheating, with Binance's Estimated Leverage Ratio (ELR) for ETH reaching an all-time high of 0.53, Cointelegraph reported. The ELR, calculated by dividing open interest by exchange reserves, indicates the level of leverage used by traders. A higher ratio suggests excessive market optimism and a greater risk of forced liquidations. From a technical perspective, the outlet noted that while short-term momentum remains positive, the key question is whether the rally can be sustained. If ETH fails to reclaim $4,700, it could be confined to a range between $4,350 and $4,700. A drop below $4,350 could trigger a seasonal correction.