news 
Ethereum Short Positions Hit Record High – Short Squeeze Incoming?
The price of Ethereum has been stuck in a consolidation phase over the past three days, oscillating between $2,700 and $2,600. Despite this lack of movement, there’s been an uptick in short positions on the altcoin, with a record high number of short sellers increasing their bets.
Data from Kobeissi’s Letter reveals that the number of short positions has surged since February 2nd, when Ethereum crashed by over 30% in under three days. This crash was one of the largest liquidation events in crypto history, with over $2 billion wiped out within a single day.
According to reports, short sellers have been increasing their positions at an alarming rate, with shorts positioning rising by an astonishing 500% since November last year. This bearish outlook is attributed to various factors, including a negative market sentiment and concerns about the Ethereum network’s recent activity.
Despite this negativity, there are several reasons why Ethereum could be due for a significant price surge in the near future. Firstly, the recognition of Ethereum by World Liberty Finance, a DeFi platform backed by the Trump family, could significantly boost the altcoin’s long-term outlook. Additionally, Eric Trump recently tweeted that it was “a great time to add ETH”, further fuelling enthusiasm around the cryptocurrency.
Furthermore, institutional investors appear to be betting big on Ethereum, with weekly inflows of $420 million into spot Ethereum exchange-traded funds (ETFs) as reported by SoSoValue. This trend highlights a growing interest in Ethereum that could lead to an upward price movement.
In the event that Ethereum’s price experiences a sudden surge and reaches the liquidation zones, short sellers will be forced to close their positions by buying, thereby creating a short squeeze scenario. This phenomenon typically leads to a sharp increase in the cryptocurrency’s price as sellers frantically try to recover losses.
It remains to be seen if Ethereum will experience this upward movement, but with such an unprecedented number of short positions being held, it’s clear that there is significant potential for a short squeeze scenario to unfold in the near future.
Source: zycrypto.com
