Ethereum Speculators Have Built the Largest $ETH Short Position in History

Institutional short positions have soared by 40% in just one week and an astounding 500% since November 2024, according to data from the Kobeissi Letter.

Ethereum institutional short positions have soared by 40% in just one week and an astounding 500% since November 2024, according to data from the Kobeissi Letter.

This marks the highest level of institutional bearishness on Ethereum in history, and it could spell even more trouble for the second-largest coin by market cap.

The Kobeissi Letter noted that on February 2, Ethereum suffered a severe 37% decline within 60 hours amid growing market tensions. The drop saw about $1.2 trillion wiped out from the broader cryptocurrency market in a matter of hours.

While other major cryptocurrencies, including Bitcoin, have managed to rebound, Ethereum is struggling at market lows. The coin is trading nearly 45% below its all-time high set in November 2021. Right now, the coin is trading at $2,640, down 0.4% in 24 hours.

Despite the crypto-friendly regulatory environment under the Trump administration, Ethereum has remained under heavy selling pressures for weeks.

Analysts had expected that after the US Securities and Exchange Commission (SEC) reduced its regulatory scrutiny over cryptos, ETH would be one of the coins to experience rallies. Even popular figures like Eric Trump have even publicly endorsed the asset. Yet, large institutional players remain overwhelmingly bearish on the coin.

Market analysts speculate that hedge funds’ short-selling spree could be due to several factors, including potential market manipulation, risk-hedging strategies, or long-term doubts about Ethereum’s future growth.

According to an update from Barchart on X today, settled leveraged net short positions on the Chicago Mercantile Exchange (CME) reached a record 11,342 contracts.

This marks the highest level of institutional bets against Ethereum in history, and the coin’s performance in February could lead to further record-breaking.

Between February 1 and February 7, Ethereum’s price dropped 20%, falling from $3,300 to as low as $2,600. Since February 7, the selling pressure has eased, and bulls have managed to weather the selling pressures to push the price down further.

However, Ethereum has yet to regain ground back to the $3,000 level, continuing to trade within a tight range between $2,500 and $2,700.

ETH price has been in a prolonged downtrend, and its failure to hold critical technical levels has exacerbated the decline. After breaking below the 200-day moving average at around $2,950, ETH lost further ground, dropping below the $2,700 support level. Now, market observers are watching the $2,400 support zone as the next key level.