What’s happening with Ethereum? Shorts up +40% in a week, +500% since Nov 2024

Ethereum has faced its most short-selling activity 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. Wall Street hedge funds have never been this bearish on Ethereum, adding to the bearish woes of 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, 0.4% down in 24 hours.

Hedge funds echo bearish stance on Ethereum

The crypto-friendly regulatory environment under the Trump administration hasn’t done much for Ethereum, as it 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 stem from multiple factors, including potential market manipulation, risk-hedging strategies, or long-term doubts about Ethereum’s future growth. 

Per an update from Barchart on X today, settled leveraged net short positions on the Chicago Mercantile Exchange (CME) reached a record 11,342 contracts. Institutional bets against Ethereum have never reached this high in history, and ETH’s performance in February could make it even worse.

BREAKING 🚨: Ethereum

Speculators have built the largest $ETH short position in history pic.twitter.com/GVpKfi0Aw7

— Barchart (@Barchart) February 9, 2025

Between February 1 and February 7, Ethereum’s price plummeted 20%, falling from $3,300 to as low as $2,600. Since February 7, selling pressure has eased, and bulls 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, exacerbated by the asset’s failure to hold critical technical levels. 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.

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