As Ethereum (ETH) barely manages to sustain above the psychologically important $2,000 level, there are 3 major indicators that foreshadow further breakdown in the cryptocurrency’s price, buoyed by rapid liquidation of long positions.
ETH leverages ratio climbs to 0.74
The first key sign of ETH’s weakening price structure is the digital asset forming consistently lower highs over the recent weeks. Since mid-May 2026, there has also been a significant drop in ETH’s trading volume.
The following daily chart shows ETH tumbling from around $2,302 on May 10, to $2,000 as of Friday – a price pullback of about 12 percent in almost 3 weeks.
While the price has fallen, ETH’s estimated leverage ratio (ELR) remains elevated at around 0.74. The following chart shows the yellow line (leverage) on an uptrend, confirming that long positions are mostly concentrated in a narrow price cluster.
Usually, a rising leverage reading is supported by price expansion. However, in ETH’s case, despite the leverage jumping up, the price action remains relatively subdued, hinting that the market structure is driven more by derivative positioning instead of heavy spot demand.
In addition, the ETH funding rate is up. The blue line in the chart shared above is still in positive territory, meaning that despite longs dominating the market, there has been no meaningful strength seen in the cryptocurrency’s price.
This divergence between rising funding rate and falling price is important as it shows that traders are exhibiting weakening buying momentum. Another momentum indicator, the relative strength index (RSI) confirms ETH’s fragility.
The RSI has plummeted all the way down to 31, placing it very close to oversold territory, showing that selling pressure on ETH remains strong in the short term. Further, it has not yet produced a convincing recovery signal, dampening ETH bulls’ hopes of a quick turnaround.
Ethereum protocol continues chasing upgrades
Regardless of the negativity surrounding ETH’s price action – with some analysts predicting a carnage all the way down to $1,075 – the Ethereum ecosystem continues to build and achieve new technological milestones.
On Tuesday, the ERC-7943 proposal got approved, aimed toward developing a unified interface that enables interoperable smart accounts across applications and protocols.
Similarly, on Monday, Facet co-founder Tom Lehman proposed adding privacy-focused ERC-8182 proposal in Ethereum’s Hegota upgrade, scheduled to go-live in Q3 2026.