[DigitalToday reporter Jinju Hong (홍진주)] Warnings are emerging about volatility in the Ethereum (ETH) market as leverage surges.

On-chain data analytics firm CryptoQuant, cited by blockchain media outlet BeInCrypto on March 19 (local time), showed Binance's estimated leverage ratio (ELR) for Ethereum hit a record high of 0.751. That means about 75 percent of all trades use leverage. It suggests the market has entered an excessively risky zone.

Analysts point in particular to the fact that the latest rise in leverage expanded quickly without a price correction. It shows the recent rise in Ethereum may have been driven by derivatives trading rather than spot demand.

Past cases show that in high-leverage periods, even small price moves can trigger large-scale liquidations in a chain reaction. In fact, in October last year, about $19 billion in liquidations occurred in a similar situation.

Still, the current situation is not completely identical to the one at the time. The ELR is calculated by dividing open interest (OI) by exchange reserves, and the latest reading is assessed to have been influenced by a recent increase in OI and a decline in Ethereum held on exchanges at the same time. Binance's Ethereum open interest recently rose to about $6.6 billion, but it remains below the peak of $12 billion seen in October last year.

Another variable is the movement of funds. Exchange reserves fell as institutional investors withdrew ETH from exchanges for staking yields, and that may have pushed the ELR higher more quickly. That could be a positive signal in the long term, but it could make the market structure unstable in the short term.

Recent macro factors are also a burden. After the U.S. Federal Reserve announced it would hold interest rates, Ethereum fell more than 6 percent, and about $153 million in liquidations occurred in the process. Most were leveraged long positions.

Experts said the market is relying excessively on leverage, meaning even a small shock could trigger sharp price swings, and urged caution over the possibility of increased short-term volatility.