Ethereum New Liquidity Cycle? This Binance Indicator Says Yes

According to CryptoQuant, Ethereum's estimated leverage ratio on Binance might be hinting at a liquidity shift. The Ethereum estimated leverage ratio on Binance has gradually recovered, reaching a value of 0.69 in mid-March.

The Oct. 10 sell-off on the market saw a leverage reset, which caused the Ethereum estimated leverage ratio (ELR) on Binance to fall from 0.56 to 0.41, marking a 27% decline. This sell-off marked the largest 24-hour liquidation event in crypto history, with over $19 billion in leveraged positions liquidated within 24 hours.

Since then, Ethereum's estimated leverage ratio on Binance has seen a recovery and has rebounded, reaching a value of 0.69 as of this writing. This shift signals fresh optimism on the market, with investors seeking additional leverage.

CryptoQuant's Ethereum estimated leverage ratio (ELR) is a market indicator that measures the average leverage used by traders on the Ethereum derivatives market.

Ethereum price

According to Ali charts, the $2,152 resistance has been cleared, and the trend has officially shifted bullish. The next targets expected for $ETH are at $2,337 and $2,538.

Veteran Trader Peter Brandt highlights a "small bottom" on Ethereum's daily chart located "in an area of longer term historical support."

Ethereum rose for eight days at a stretch from March 9 to 17, reaching $2,386 on Monday before slightly retreating. If the rise continues, $ETH might rise to $2,600 and then to $3,450. Such price action suggests that Ethereum may have bottomed out at $1,747.

The $2,000 level remains one to watch out for on the downside. A close below this level might signal that the bears dominate at higher levels and the price may fall to $1,916.

The Fed meeting that begins today and concludes Wednesday remains the focus for traders. CME FedWatch still prices a 95% probability of Fed rates being held at 3.5% to 3.75%, so the decision itself is a non-event.