Ethereum Slides After Losing $3.4K Support; Leverage Risks Rise
Ethereum’s recent pullback accelerated after the $3.4K support failed, underscoring that leverage remains a key vulnerability in the market. With a large share of positions carried on margin, cracks in price can trigger liquidations and rapid volatility, amplifying moves well beyond fundamentals. The negative sentiment is clear: when leverage dominates, confidence can evaporate fast and produce outsized swings. What happens next depends on whether deleveraging paves the way for consolidation or sparks deeper sell-offs. Traders and risk desks should watch on-chain leverage metrics, funding rates and open interest for early signs of capitulation or stabilization. For market participants, reducing leverage and tightening risk controls is prudent until a clear technical base and calmer funding conditions return.