Ethereum Price Stabilizes on Institutional Demand Amid Leverage Crash
Ethereum's price has been steadily increasing towards $2500, prompting traders to add massive amounts of leverage on Binance and Bybit. According to CryptoQuant, the combined Open Interest (OI) on these two exchanges grew by $1.12 billion over the seven days ending August 22nd.
However, this momentum has dramatically fallen off, with leverage collapsing 90.9% to just $102 million as of August 30th. Binance's OI fell from $843 million to $94 million, while Bybit plunged from $277 million to $8 million.
Despite the decrease in leverage, Ethereum's price remains near $2500. In fact, this rally is now relying less on rapid expansion of derivatives to support the price.
Institutional demand is increasingly supporting ETH's stabilization, with U.S.-based Ethereum ETFs having approximately $1.5 billion in investment over 10 days since August 15th. BlackRock's ETHA accounted for 71.9% of this total investment, or around $1.02 billion.
This investment represents direct demand for ETH in the spot market without adding leverage through futures. Continued ETF inflows are likely to support ETH's stabilization even if derivative positions continue to be reduced.