Tron founder Justin Sun, has stirred up the crypto market after highlighting a significant issue that Ethereum is facing. Sun’s post has drawn the attention of the crypto community after indicating that the leverage issue on Ethereum could be detrimental to the ecosystem. 

On the other hand, the price of Ethereum has faced a lot of uncertainty which has resulted in a huge price dip. The top altcoin by market capitalization recently dropped from $2,150 to low $1,780, but is currently showing signs of a potential recovery. However, the leverage issue is still a major point of concern for Ethereum. 

Sun Points Out Widespread Leverage Issue in Ethereum

Ethereum is currently struggling with a leverage issue as confirmed by Justin Sun. In his recent post on Mar. 12, 2025, the Tron blockchain founder highlighted the need for Ethereum to address the high leverage issue resulting from traders conducting operations with ETH on both decentralized and centralized platforms. 

https://twitter.com/justinsuntron/status/1899391401672216839

“In the short term, Ethereum also needs to address the widespread leverage issue,” Sun wrote on X. Justin Sun further added that addressing the issue early is crucial citing that ”it would be better to intervene early and resolve some of the leverage rather than waiting for it to implode.” 

If the leverage issues implodes it could result in losses to protocols and DeFi projects. This could hurt DeFi users as well the general Ethereum network which could drive investors away. Such a scenario would further hurt the price of Ethereum which has been struggling in recent times. According to Sun, “a negotiated solution is recommended.” 

Leverage Issue on Ethereum; More Details

Ethereum’s leverage issue as pointed out by Tron founder means that there is over-leveraging on Ethereum trades. This issue is often experienced in the derivative market which includes trading of perpetual futures and options. Lately, traders have been over- leveraging on ETH-based trades with some going for up to 50 times (50x) leverage or even 100x. 

With excessive leveraging, there is a higher risk of liquidations in a scenario where volatility of ETH shoots. Additionally, some traders also use Ethereum as collateral when engaging in DeFi protocols that are Ethereum-based hence making the problem a significant one. In case of a slight drop in ETH, this scenario would result in huge liquidation of ETH loans. 

Alva, a crypto platform using AI for analytics, supported Sun’s recommendations for Ethereum to resolve the issue. “Leverage in the ETH ecosystem is like a ticking time bomb. Early intervention is the name of the game,” the platform shared on X. Alva further added that “a negotiated solution is key to dodge disaster, stabilize protocols, and boost investor confidence.” 

Ethereum’s (ETH) Current Price Performance

Data on Coinmarketcap shows that Ethereum is trading at $1,919.95 as of this writing. ETH recently breached the $2,000 price level yesterday (March. 10, 2025). This crash saw Ethereum drop to December 2023 lows. 

However, Ethereum seems to be headed to the $2,000 mark with the current price just below this level. Nonetheless, ETH is still down by 5.29% on the day but could surge further. 

The trading volume of Ethereum is on a higher note with Ethereum recording a 44.64% surge. Ethereum has recorded a trading volume of $40.48 Billion over the last 24 hours. If buyers dominate the market, Ethereum could recover recent losses. 

Enthusiast Is “Leaning Very Bearish” On Ethereum

Crypto analyst Tony Severino “The Bull” highlighted in a post on X that he is still leaning very bearish on Ethereum. “I still lean very bearish [on] Ethereum” he stated. His stance is because “ETH CME Futures chart monthly RSI just reached the lowest reading ever.” 

The current level is lower than the 2022 bottom and could be “suggesting that the selling is the strongest ever and could continue towards oversold levels.” Generally, the crypto participants are rather cautious about Ethereum until favorable conditions are achieved in the market.