Usman Salis
⬤ Ethereum's derivative markets are sitting on a powder keg of leveraged positions right now. According to Ted, a 20% rally would liquidate roughly $4.6 billion in short positions, while a 20% drop would wipe out about $4.58 billion in longs. ETH is currently trading almost exactly in the middle of these two massive leverage clusters.
⬤ The liquidation heatmap paints a clear picture - cumulative short leverage stacks up above current prices while long positions pile up below. Major exchanges like Binance, OKX, and Bybit are all contributing to these dense liquidation zones. This setup creates a dangerous equilibrium where Ethereum is essentially trapped between two liquidity time bombs. We saw similar patterns play out during Ethereum faces $2.5B liquidation risk at key price levels.
⬤ What's striking is that despite ETH being down roughly 60% from its peak, traders are still heavily leveraged on both sides of the market. This isn't the first time we've seen Ethereum in this precarious position - comparable setups emerged during the $3B liquidation storm looms for Ethereum price phase and the massive $1B liquidation wave in Ethereum.
⬤ When liquidation pools are this large and evenly balanced, they tend to amplify price movements once things start moving. If ETH breaks out in either direction, we could see a cascading effect as liquidations trigger across multiple price levels, forcing even more positions to close and accelerating the move.
Usman Salis
