Of that total, $250 million corresponds to ETH longs solely – just $50 million shy of BTC. This emphasizes how leveraged this market is as it is abnormal that a 5% 24-hour decline can inflict so much pain on traders.

Despite the wipe-out, ETHUSDT’s long-short ratio of accounts in Binance currently sits at 2. Although this is still an extreme level that indicates a heavily ‘one-sided’ market that is in desperate need of a correction, the metric has cooled off from a previous high of 2.77 back on May 18.

In a scenario like this, the risk of a strong pullback increases as market makers could aim to balance out their order books by flushing out excess longs. This could trigger a strong long squeeze, especially if certain key levels are hit.

At this point, this could turn into a liquidity quest for market makers to find where most ETH longs stand. If they manage to press the right keys, they could trigger a sizable correction by blowing up a ton of long orders.

Ethereum has clearly entered a stage of consolidation as the market needs a pause after the latest rally to determine where it should be heading next.