ShayanMarkets
Ethereum's Futures Market Might Become Overheated! Better to Watch Out!
The following chart demonstrates the Estimated Leverage Ratio metric alongside ETH’s price. The metric measures the average amount of leverage used by the futures market participants. Typically, increasing values indicate that more investors are taking high-leverage risk in the derivatives market. The Estimated Leverage Ratio has slightly increased during the last few weeks, showing that the futures market might become overheated due to the recent bullish price moves. Nevertheless, the metric hasn’t reached concerning levels yet. But, if it continues spiking, participants should be careful due to the possibility of a short or long squeeze event. In this case, a sudden impulsive move will occur in Ethereum’s price. In conclusion, the metric’s behavior should be monitored in the upcoming weeks to prevent further losses and being stopped out.