Based

Long

Fusaka

Recent data shows ETH positions on derivative markets remain small, but it trades with more leverage. On Binance, ETH leverage reached an all-time peak just ahead of the Fusaka upgrade.&nbsp;
ETH is trading with the highest leverage ratio on Binance. In the past week, leverage increased to a new record, flashing a signal for turbulence on the ETH market.&nbsp;
The ETH leverage ratio returned close to its all-time high on average, based on all exchange <a href="https://cryptoquant.com/asset/eth/chart/market-indicator/estimated-leverage-ratio?exchange=all_exchange&amp;window=DAY&amp;sma=0&amp;ema=0&amp;priceScale=log&amp;metricScale=linear&amp;chartStyle=line" rel="noopener noreferrer nofollow" target="_blank">data</a>. On Binance, the leverage ratio is at an all-time high, showing a rapidly expanding taste for risk.&nbsp;
<figure style="width: 100%" class="wp-caption alignnone">
 <img loading="lazy" src="https://www.cryptopolitan.com/wp-content/uploads/2025/12/BinanceLeverageDec32025.png" alt="ETH trades with record leverage ahead of the Fusaka upgrade " width="1540" height="858">
 <figcaption>
 Leverage increased to an all-time peak on Binance, showing traders were willing to take more risks on ETH ahead of the Fusaka upgrade. | Source: <a href="https://cryptoquant.com/asset/eth/chart/market-indicator/estimated-leverage-ratio?exchange=binance&amp;window=DAY&amp;sma=0&amp;ema=0&amp;priceScale=log&amp;metricScale=linear&amp;chartStyle=line" rel="noopener noreferrer nofollow" target="_blank">Cryptoquant</a>
 </figcaption>
</figure>
Binance’s ratio surged to a record of 0.57, indicating traders were operating with an unprecedented level of risk. While the notional value of positions decreased and <a href="https://www.cryptopolitan.com/2-3/" rel="noopener noreferrer nofollow">liquidity flowed away</a> since October 11, the risk ratio only climbed. Traders were probably attempting to recover their losses faster, anticipating the recovery of ETH.&nbsp;
The ratio climbed faster in the past week, in anticipation of the <a href="https://www.cryptopolitan.com/ethereum-locks-in-dec-3-for-fusaka-upgrade/" rel="noopener noreferrer nofollow">Fusaka upgrade</a>. The hard fork, which is not expected to disrupt the work of Ethereum or L2 chains, is still expected to cause a more significant directional trade.&nbsp;
<h3 id="span-style-font-weight-400-eth-market-becomes-potentially-riskier-span">ETH market becomes potentially riskier</h3>
ETH derivative markets trade with an open interest of $17B, recovering from a recent low of $15B. The growing open interest, combined with increased leverage, may make ETH exposed to sudden and volatile price action. Even a small price shift or a whale selling or buying can cause cascading liquidations on Binance.&nbsp;
At this point, ETH is poised in the middle between a potential sweep of long positions and a short squeeze to a higher level.&nbsp;
Based on the liquidation heatmap, a short squeeze can take ETH up to $3,200. Long positions can also be attacked, going back to $2,900.
ETH recovered to $3,089.42, still trading with a fragile setup. The Ethereum fear and greed index recovered to <a href="https://cfgi.io/ethereum-fear-greed-index/" rel="noopener noreferrer nofollow" target="_blank">54 points</a>, signaling neutral sentiment following weeks of more fearful trading.&nbsp;
Under the current liquidity conditions, ETH may grow above $3,150 in the short term. However, peaks in the leverage ratio are often followed by sharp corrections or shakeouts of liquidity. The ratio itself does not guarantee a price move, but signals a potential pivot from traders.&nbsp;
ETH may also discount the actual news of the Fusaka update, leading to dumping and liquidations, or the unwinding of leveraged positions. For traders, the mix of relatively low open interest and high leverage is a form of protection, even if ETH chooses to move downward again.&nbsp;
<h3 id="span-style-font-weight-400-can-eth-pivot-in-december-span">Can ETH pivot in December?&nbsp;</h3>
ETH locked in losses of 22.2% in November, and over 25% losses for the fourth quarter to date.&nbsp;
One of the major sources of demand, treasury companies, also limited their buying. BitMine was among the only active spot buyers, while some whales slowed down their activity.&nbsp;
ETH sellers emerged among older whales and ICO participants. At the same time, treasury companies only added 370,000 ETH, as Cryptopolitan <a href="https://www.cryptopolitan.com/ethereum-dats-only-370000-eth-in-november/" rel="noopener noreferrer nofollow">reported</a>.&nbsp;
In December, ETH has been known for mixed performance. In 2024, the token lost over 10% for the last month of the year. Based on options data, ETH expects the expiry of $3.68B in contracts on December 26, with a maximum pain at $3,200. 
The options market may boost ETH volatility even more in the second half of December, based on the larger event of monthly, quarterly, and annual expiry.
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ETH leverage ratio on Binance rises all-time high ahead of Fusaka upgrade

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