Ethereum's derivatives market is showing a marked reduction in leverage, even as institutional outflows and subdued US trading sentiment continue to weigh on its recovery. Data from CryptoQuant indicates that the Estimated Leverage Ratio (ELR) for ETH has dropped to 0.62, the lowest level since November 2025. This decline comes amid a streak of net withdrawals from US spot Ethereum exchange-traded funds, which have now recorded ten consecutive days of outflows.
The Estimated Leverage Ratio compares the open interest in derivatives with the amount of the asset held in spot exchange reserves, offering a gauge of how much leverage traders are using relative to available balances. Ethereum's ratio falling to 0.62 is notable because it occurs even as exchange reserves are trending lower. Combined with declining open interest, this suggests that leveraged participation has contracted rather than expanded during recent upward price movements.
Lower leverage can reduce the risk of cascading liquidations, but it also signals that the recovery has attracted limited fresh derivatives exposure. Ethereum's Net Taker Volume remains increasingly negative, indicating that market-order selling exceeds market-order buying. This points to persistent sell-side pressure in perpetual futures, although it does not independently confirm whether each sell order represents a new short position or the closure of a long.
Together with declining leverage, these data suggest traders remain cautious. Reduced leveraged exposure could limit the scope of an extended long squeeze, but it does not eliminate the risk of further price declines. The Coinbase Premium Index has fallen to -0.117, its lowest reading since August 10, signaling that ETH is trading at a discount on Coinbase relative to the comparison market, consistent with weaker US buying demand.
Institutional flows remain under pressure. US spot ETH ETFs recorded $85.4 million in net outflows on Monday, with a slight inflow of $24.84 million on Tuesday, according to SoSoValue. Monday's outflow extended the withdrawal streak to ten consecutive sessions, the longest since the May 11–June 3 period. Persistent redemptions remain an obstacle to a stronger recovery.
Ethereum technical forecast: ETH faces $2,548 resistance
The ETH/USD daily chart has been consolidating in recent days. Currently, ETH is attempting to firmly establish strong support at the 50-day exponential moving average near $2,501. Bulls are looking to reclaim the first horizontal resistance at $2,548, followed by the 20-day EMA around $2,578.
A sustained move above those barriers could bring $2,636 and $2,781 into focus. More distant resistance levels sit at $3,075 and $3,253. Momentum remains subdued, with the Relative Strength Index around 43, below its neutral midpoint, while the Stochastic Oscillator near 27 indicates weak momentum approaching conventional oversold territory.
On the downside, initial support stands at $2,413. Below that, the $2,355 horizontal level and the 100-day EMA form a support area. A sustained break lower would expose $2,204 and $1,971.
This article is for informational purposes only and does not constitute financial advice.
