Matrixport Warns Ether’s Rally May Falter as Leverage Stokes Volatility

Ether’s recent price surge could be on shaky footing, with analysts cautioning that the rally was driven more by speculative leverage than by fundamental demand.

In a note released Monday, Matrixport warned that “leveraged traders have pushed [ETH’s] price higher in the absence of fundamental support,” leaving the cryptocurrency vulnerable to sharp declines like the one witnessed over the weekend.

On Saturday, Ether dropped over 8%, leading losses among major cryptocurrencies as markets reacted to the U.S. airstrikes on Iranian nuclear sites, sparking widespread volatility.

Matrixport pointed to this sell-off as evidence of how heavily leveraged positions can amplify downside risks, suggesting that persistently high leverage could keep pressuring ETH prices.

As of press time, Ether was trading around $2,248, down from highs above $2,400 seen last week, while derivatives data showed traders aggressively positioning for further declines.

Signals from the options market are reinforcing this caution. CoinDesk analyst Omkar Godbole highlighted over the weekend that ETH’s 25-delta risk reversals — which compare the cost of protective puts against calls — have tilted negative for June and July expiries. This indicates traders are paying a premium to protect themselves against potential downside volatility.

QCP Capital echoed these sentiments in a weekend update, stating that “risk reversals in both BTC and ETH continue to show a preference for downside protection,” as long holders actively hedge their spot exposures.