Ethereum leverage reaches record high, market volatility may intensify! 📈

Hello everyone, today we will talk about the latest developments in Ethereum. According to data from CryptoQuant, Ethereum’s rough calculation leverage reached a new high of 0.57 on Wednesday. This is a quite significant increase! By comparison, the leverage ratio at the beginning of last year's fourth quarter was only 0.37. What does this change mean? Simply put, more and more traders are using leverage to trade, and risk-taking and speculation are increasing in the market.

So, what is leverage? It is calculated by dividing the cumulative open interest of globally listed standard futures and perpetual futures contracts by the total number of ETH in the wallet associated with the futures trading platform. An increase in leverage often means that market participants are more aggressive in their expectations of future price movements, which, of course, may also lead to greater price volatility.

It’s worth noting that Ethereum’s leverage is much higher than Bitcoin’s. As of now, Bitcoin’s leverage ratio stands at 0.269, and while this is the highest level since early 2023, it is still below the all-time high of 0.36 set in October 2022. According to CryptoQuant’s predictions, Ethereum may experience twice the price volatility of Bitcoin in the near future.

What does this mean for the market? For investors, this may be an opportunity or a challenge. High leverage may bring greater returns, but it also comes with higher risks. Therefore, everyone must do a good job in risk management when making investment decisions!

Dear readers, what do you think about the increase in Ethereum leverage? How do you think this will affect the market? Welcome to share your views in the comment area and let’s discuss it together!