Ethereum short positions surge 40% as price tests $2,600 support

Ethereum (CRYPTO:ETH) short positions have surged 40% in the past week, marking the largest bearish bet on the altcoin in history.  

This increase in short interest comes amid strong selling pressure on Ethereum, with hedge funds continuing to place significant short positions.  

ETH’s price currently hovers at $2,636, showing a 1% decline.  

Analysts are debating whether Ethereum is headed for further decline or if a potential short squeeze is looming.  

Ethereum’s short positions have risen by 40% in just one week, with a staggering 500% increase since November 2024.  

This surge in bearish sentiment is the largest on record, signaling that investor confidence in the altcoin is dwindling.  

Earlier in February, Ethereum dropped 37% in just three days, triggered by concerns surrounding US trade policies.  

The token has faced heavy selling pressure, but despite robust trading volumes, it has struggled to recover from recent losses.  

As the ETH price remains volatile, analysts are watching a critical support level of $2,600.  

Crypto analyst Ali Martinez noted that if this level holds, ETH could potentially rebound, pushing its price back to $3,000 or even $4,000.  

Traders are keenly monitoring this support zone to gauge Ethereum's next move.  

Ethereum’s market cap stands at $317 billion, with daily trading volume surging 20% to $19.5 billion.  

Despite the current volatility, Ethereum continues to see strong institutional interest.  

In December 2024, Ethereum saw over $2 billion in inflows, including a record-breaking weekly inflow of $854 million.  

Spot Ethereum ETFs also outperformed Bitcoin (CRYPTO:BTC) ETFs in recent weeks, recording a net inflow of $420 million.  

While the short position surge paints a grim picture, some analysts remain optimistic, drawing parallels to Ethereum’s 2020 market rebound.  

With a significant drop in ETH gas fees, Ethereum could see a resurgence, with some projections suggesting the altcoin could reach $10,000 in the future.

At the time of reporting, the Ethereum (ETH) price was $2,632.78.