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The Impact of Leverage on Ethereum’s Price Movement
Ethereum has maintained its downward trend since September. This trend has become especially noticeable in recent weeks. The chart shows that buyers have recently been struggling to push the price higher. Ethereum reserves on Binance are gradually declining. We can consider this positive because there is less Ethereum available for sale. However, this supply squeeze will have no effect unless new buyers enter the market or existing buyers take action. The chart shows an increase in liquidations in both directions. Recently, liquidations of long positions have been higher than those of short positions. From this, we can infer that long positions may have been cleared out during the recent decline. However, short positions are not currently high enough to suggest the possibility of a short squeeze. For this reason, there is nothing preventing the downward pressure from continuing for a while longer. If the price continues to fall, liquidations of long positions could trigger further selling and continue to increase short term pressure. When the price is weak, low exchange reserves may not make up for insufficient demand. It seems that the current movement is increasing leverage driven activity. Beyond that, I can see no signs in the market confirming an upward move.