Leverage Could Undermine Ether’s Recent Gains, Matrixport Analysts Say

Ether’s Rally Built on Leverage Faces Breakdown Risk, Matrixport Warns

Ether’s recent upswing could be at risk of reversal, with analysts at Matrixport warning that the move has been fueled more by speculative leverage than genuine demand.

In a Monday research note, Matrixport said that “leveraged traders have driven ETH higher without strong fundamental backing,” leaving the asset vulnerable to sharp pullbacks—like the one seen over the weekend.

On Saturday, Ether plunged over 8%, leading losses across major cryptocurrencies after U.S. airstrikes on Iran’s nuclear infrastructure sparked a wave of geopolitical risk and market volatility.

According to Matrixport, this decline illustrates how excessive leverage can amplify downside moves. The firm added that continued high leverage levels could weigh on prices if risk sentiment sours again.

At the time of writing, Ether was trading near $2,248, down from last week’s peak above $2,400. Meanwhile, derivatives markets suggest growing bearish sentiment, as traders increasingly hedge against further downside.

Options activity reinforces this cautious outlook. As noted by CoinDesk’s Omkar Godbole, ETH’s 25-delta risk reversals for June and July have turned negative—indicating that investors are paying more for protective puts than for upside calls, a clear sign of bearish hedging.

QCP Capital echoed that sentiment, saying in a weekend note that “risk reversals in both BTC and ETH continue to reflect downside protection demand,” as market participants look to safeguard long positions amid heightened uncertainty.