Ethereum‘s derivatives market has witnessed a notable decline in leverage, as persistent outflows from institutional products and weak US trading activity weigh on the cryptocurrency’s recovery prospects.
Leverage and institutional flows weaken
Recent data from on-chain analytics provider CryptoQuant indicates that Ethereum’s Estimated Leverage Ratio (ELR) has declined to 0.62. This marks its lowest reading since November 2025, pointing to a reduction in the use of leverage by traders in the ETH market.
The Estimated Leverage Ratio is calculated by comparing open interest in derivatives to the amount of an asset held in spot exchange reserves. It provides insights into how much of the market’s activity is driven by leverage versus actual holdings.
Mini dictionary: Estimated Leverage Ratio (ELR), a metric that assesses the proportion of leverage used in the derivatives market by comparing derivatives open interest with spot exchange reserves.
The drop in leverage has coincided with declining open interest on Ethereum derivatives exchanges. This trend indicates that traders have generally adopted a more cautious stance, preferring not to expand leveraged positions despite recent price movements.
In addition, the Net Taker Volume for Ethereum remains negative, reflecting ongoing sell-side pressure in perpetual futures trading. This metric highlights that market-order selling currently exceeds buying across these instruments.
The cautious sentiment was further underscored by the Coinbase Premium Index, which recently fell to -0.117. This negative value means that Ethereum is currently trading at a discount on Coinbase compared to other major exchanges, suggesting more muted demand from US-based buyers.
Ethereum’s market data continues to highlight cautious behavior from traders, as the decline in leverage and persistent negative taker volume signal that participants remain wary of new long positions.
Institutional flows have also been under pressure. Data from SoSoValue shows that US-listed spot Ethereum ETFs reported $85.4 million in net outflows on Monday. Although there was a modest inflow of $24.84 million on Tuesday, the 10-day net redemption streak is now the longest since mid-May to early June.
| Date | ETH ETF Net Flows |
|---|---|
| Monday | $85.4 million outflow |
| Tuesday | $24.84 million inflow |
| Previous 10 days | Consecutive outflows |
Technical outlook for ETH
Technically, Ethereum has been consolidating on its daily chart as it attempts to build support near its 50-day exponential moving average (EMA), which sits around $2,501.
The immediate challenge for buyers lies at the $2,548 resistance level. A successful move above this first barrier would bring the 20-day EMA, currently at about $2,578, into focus as the next key resistance.
If bullish momentum strengthens, traders may watch for targets at $2,636 and $2,781, with further resistance identified at $3,075 and $3,253.
Momentum indicators remain subdued. The Relative Strength Index (RSI) is hovering near 43, below the neutral 50 midpoint, while the Stochastic Oscillator has dropped to 27, which signals weak momentum and nears oversold territory.
On the downside, initial support can be found at $2,413. Further declines could expose Ethereum to support at $2,355 and its 100-day EMA. Deeper pullbacks would likely bring $2,204 and $1,971 into view as additional support areas.
Ethereum must clear the $2,548 and $2,578 barriers to shift momentum in favor of buyers, while sustained ETF outflows and sluggish US demand create challenges for a robust recovery.
