After the sharp market sell-off on October 11, Ethereum (ETH) has staged a partial recovery, but analysts warn the bounce may be fueled by renewed leverage chasing.
According to Maartunn, a community analyst on CryptoQuant, ETH open interest surged 8.2% in the past 24 hours, suggesting traders are once again using high leverage to capitalize on short-term price movements. “Looks like some of you are trying to trade your money back,” he noted on X, calling it a “revenge pump.”
Historically, data shows that around 75% of such leverage-driven rallies tend to reverse, while only 25% sustain their momentum. This pattern often reflects speculative trading behavior rather than organic buying interest, especially after major market crashes, like the one on Friday, when over $19 billion in liquidations hit the market, making it the largest crash in the history of crypto.
In this crash, while ETH briefly dipped below $3,800, it has since found support and resurged above $4,100 at the time of writing, according to CoinMarketCap. However, the rapid increase in open interest without a corresponding rise in spot volume raises concern for market participants. As there are no fresh inflows, there is a high possibility of futures speculation driving the prices upwards, and it can again burst out soon.
With volatility still high, analysts urge caution as funding rates and liquidation levels reset across major exchanges. “Trade carefully,” Maartunn added, reminding traders that leverage-induced rebounds often end with sharp reversals.
Also Read: The 9/11 of the Crypto Market: The October 10 Crash
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