By Nermeen Nabil Khear 
The post Ethereum News: Is a Short Squeeze Coming? Hedge Funds Push ETH to the Brink appeared first on Coinpedia Fintech News
Ethereum, the second-largest cryptocurrency by market cap, is under significant pressure as hedge funds ramp up their bearish bets. Despite the broader crypto market showing signs of recovery, Ethereum has been left trailing. Since November 2024, short positions against Ethereum have surged by 500%, reaching record highs, according to data from The Kobeissi Letter. This aggressive shorting signals growing concerns about Ethereum’s near-term stability.
Record-Breaking Short Positions
This sudden rise in short positions created ripples in the market, with futures contracts on the CME peaking at 11,341. In just one week, bearish bets jumped over 40%. This strong wave of negative sentiment has impacted Ethereum’s price, which currently hovers around $2,500, down 2% in the last 24 hours and nearly 45% below its all-time high from November 2021. Hedge funds seem to be betting heavily on Ethereum’s price falling further, raising fears about potential market volatility.
With such extreme short positioning, Ethereum could be set for a dramatic short squeeze. This happens when short-sellers are forced to buy back the asset to cover their positions, driving prices sharply higher. Given the current setup, sudden price swings like the February 3rd crash could become more common.
Bitcoin Flips Ethereum
Interestingly, while Bitcoin was enjoying a rally in 2024, gaining over 100%, Ethereum saw a minor rally of 3.5%. This disparity has created a gap between the two, with Bitcoin’s market cap now six times larger than Ethereum’s—levels not seen since 2020. Moreover, ETH’s slow performance has raised doubts on its long term goals compared to Bitcoin. Right now Bitcoin is dominating as altcoins in overall not in a good position due to delayed regulatory policies.
Major Sell-Offs and Market Reactions
The aggressive shorting coincided with a sharp price drop on February 2, when Ethereum plunged 37% within 60 hours following trade policy announcements from the Trump administration. This crash wiped out over $1 trillion from the broader crypto market, drawing comparisons to the infamous 2010 stock market flash crash. Despite this, Ethereum has seen strong capital inflows. In December 2024 alone, ETH attracted over $2 billion, with a record-breaking weekly inflow of $854 million. However, even support from figures like Eric Trump, who recently called it “a great time to add ETH,” hasn’t reversed the bearish trend.
- Also Read :
- Top Economic Events to Watch Next Week: US CPI & PPI Report, Powell’s Testimony Might Set Crypto Market’s Trend
- ,
A Potential Fix?
An X user Lola points to Ethereum’s high gas fees as a critical issue, impacting Layer-2 network performance. He suggests adopting SHIB, the largest native token on Ethereum, as a gas token to reduce costs. According to Lola, shifting Ethereum’s role to more of a store of value while using SHIB for transactions could help stabilize its price and improve its long-term outlook.
For now, Ethereum faces a staring competition with Bitcoin. The heavy short positions is a sign of further volatility, unless there is any positive development, ETH may continue to struggle against both market sentiment and its technical challenges.
Never Miss a Beat in the Crypto World!
Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more.
The post Ethereum News: Is a Short Squeeze Coming? Hedge Funds Push ETH to the Brink appeared first on Coinpedia Fintech News
Ethereum, the second-largest cryptocurrency by market cap, is under significant pressure as hedge funds ramp up their bearish bets. Despite the broader crypto market showing signs of recovery, Ethereum has been left trailing. Since November 2024, short positions against Ethereum have surged by 500%, reaching record highs, according to data from The Kobeissi Letter. This …
This articles is written by : Nermeen Nabil Khear Abdelmalak
All rights reserved to : USAGOLDMIES . www.usagoldmines.com
You can Enjoy surfing our website categories and read more content in many fields you may like .
Why USAGoldMines ?
USAGoldMines is a comprehensive website offering the latest in financial, crypto, and technical news. With specialized sections for each category, it provides readers with up-to-date market insights, investment trends, and technological advancements, making it a valuable resource for investors and enthusiasts in the fast-paced financial world.