CryptoOnchain2025-11-23

Ethereum Leverage Ratio on Binance Hits ATH, Signaling Extreme Risk and a Major Divergence

The Ethereum Estimated Leverage Ratio on Binance has surged to a new all-time high (ATH) of 0.562 on November 20th. This new peak arrives after a period of extreme volatility, which included one of the sharpest drops in the metric’s history around mid-October, when it fell from ~0.53 to 0.41. The swift and powerful recovery since October 13th, culminating in this new ATH, indicates an aggressive increase in risk-taking and leverage utilization by traders. The most critical and alarming observation is a stark bearish divergence with Ethereum’s price. During the same period that the leverage ratio was consistently climbing to new records, the price of ETH plummeted from approximately 4,200 to 2,800. This strong divergence suggests that traders, despite the clear downtrend in price, have not been de-risking. Instead, they appear to be aggressively opening new leveraged positions (likely longs), speculating on a market reversal or “buying the dip.” This creates a highly precarious market environment, making it extremely vulnerable to severe volatility and liquidation cascades. The buildup of such high leverage in a falling market is akin to a ticking time bomb; even a small negative price movement could trigger a massive wave of forced liquidations. Traders must be aware of this elevated risk, as the market is in an exceptionally fragile state.