Following the recent announcement regarding interest rate cuts by the FED, major investors have begun injecting capital massively into Ethereum long positions, indicating a strong bullish conviction. As reported by the tracking platform Lookonchain, these strategic movements by whales seek to capitalize on a potential upside, although the current environment presents latent threats to the financial stability of their portfolios.
The behavior of large holders reveals an unusually high appetite for risk in recent weeks. For instance, a whale known as “Bitcoin OG” expanded their exposure on the Hyperliquid platform reaching 120,094 ETH, a figure that demonstrates institutional confidence in the asset in the short term. However, this position faces significant unrealized losses and its liquidation price sits dangerously close to current technical support levels.
Likewise, other prominent actors in the crypto ecosystem are following this trend of aggressive accumulation. Trader Machi Big Brother maintains a position of 6,000 ETH, while Arkham Intelligence reported that a Chinese investor, famous for predicting previous crashes, holds a bullish bet valued at over 300 million dollars. These maneuvers suggest that whales anticipate an imminent rebound, momentarily ignoring the warning signals emitted by the market structure.
The fragility hidden behind institutional optimism and leverage
On the other hand, technical data suggests the market is at a historic turning point due to excessive debt. According to CryptoQuant, the estimated leverage ratio for ETH on Binance has climbed to 0.579, marking an all-time high that worries analysts. This level of leverage indicates that the volume of open contracts financed by debt vastly exceeds the actual assets available on the platform.
In this context, analyst Arab Chain warned that such a high proportion of leverage exponentially increases the system’s vulnerability to sudden price movements. Historically, similar peaks in leverage have coincided with severe corrections, as traders are more susceptible to cascading liquidations in both bullish and bearish trends. Therefore, any minor oscillation could trigger a devastating domino effect for those operating with tight margins.
Can the market withstand selling pressure in the face of an imminent correction?
In addition to risks derived from leverage, weakness in the spot market aggravates the general outlook for the cryptocurrency. Wu Blockchain reported that spot trading volume on major exchanges dropped 28% in November 2025 compared to the previous month. This drastic decrease in actual buying activity suggests that organic demand is not accompanying derivatives speculation, creating a dangerous divergence.
Finally, the reduction in stablecoin inflows adds another layer of complexity to the current situation. With stablecoin reserves falling by half since August, the market’s ability to absorb massive sales has been severely diminished. Consequently, the combination of low liquidity and high leverage places Ethereum long positions in a zone of extreme risk, where December’s volatility could prove fatal for overexposed whales.
