Ethereum Recovers After Market Sell-Off
After a sharp market sell-off on October 11, Ethereum (ETH) has partially recovered. However, analysts warn the rebound may be driven by renewed leverage chasing.
Leverage Chasing Fuels ETH Bounce
Maartunn, a CryptoQuant community analyst, reported an 8.2% surge in ETH open interest over 24 hours. This suggests traders are using high leverage to profit from short-term price moves. On X, he described the rally as a “revenge pump,” where traders try to recover losses quickly.
Historically, about 75% of leverage-driven rallies reverse, while only 25% continue. Such moves often reflect speculative trading rather than genuine buying interest. This pattern followed the recent crash that saw over $19 billion in liquidations, marking the largest crash in crypto history.
Market Outlook and Analyst Warnings
During the crash, ETH briefly fell below $3,800 but has since risen above $4,100, according to CoinMarketCap. The rise in open interest without a matching increase in spot volume raises concerns. It indicates futures speculation may be pushing prices up, which could lead to another sudden drop.
With high volatility, analysts advise caution as funding rates and liquidation levels reset on major exchanges. Maartunn urged traders to “trade carefully,” noting that leverage-driven rebounds often end with sharp reversals.
