Analysis: Ethereum short positions increased by 40% within a week, growing 500% since November last year

Odaily Planet Daily reports that The Kobeissi Letter posted on X, stating that a new chart from ZeroHedge shows Ethereum is facing record shorting by hedge funds, with the number of CME futures contracts reaching a new high of 11,341. Ethereum's short positions increased by 40% within a week and have grown 500% since November 2024.

It pointed out that Ethereum's history shows there is a clear correlation between large amounts of short positions and subsequent price crashes. On February 2nd, ETH plummeted significantly, dropping by 37% within 60 hours after President Trump announced tariff policies. This was almost like the flash crash in the stock market in 2010 but without any headline news. This sell-off caused over one trillion dollars to evaporate from the cryptocurrency market within several hours. Interestingly enough, even as bearish exposure continued to increase in December 2024, inflows into Ethereum remained high. In just three weeks time, ETH attracted more than $2 billion USD creating an inflow record exceeding $854 million per week.

Since early-2024 Bitcoin has risen approximately twelve times as much as Ethereum; this gap has inflated Bitcoin’s market value to six times that of Ethereum - dominance not seen since before year-2020.