Ethereum is seeing a notable shift in derivatives positions as highly leveraged long positions decline sharply across the world. market. This decline indicates that many very aggressive bullish trades were closed voluntarily or were forced out by recent liquidation events.
Could Ethereum be preparing for a short squeeze next?
Cryptocurrency investor and data analyst known as CW on X He pointed out Ethereum is going through a significant phase of deleveraging as highly leveraged long positions continue to decline significantly across the market. At the same time, short positions rose slightly, suggesting that the market is not overly crowded to the downside.
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General scope of exposure to high leverage remains Relatively low, indicating lower systemic risks compared to previous stages. Furthermore, most of the greedy long positions have already been liquidated, with the next attention now shifting towards liquidating short positions.
Amid this phase of the market, Ethereum whales are exhibiting behavior not seen in over a year, which could indicate a major shift in market dynamics. The analyst known as Ali has the charts open Since October 6, 2025, wallets containing between 1,000 and 10,000 ETH have undergone a major systemic change in market behavior.
Before this transformation, this group was in a fixed accumulation system. Between April and October 6, 2025, their holdings rose from approximately 12.95 million ETH to approximately 15.95 million ETH. million Ethereum. However, this trend has now reversed sharply.
Since October 6, the holdings of these mid-level whales have decreased from 15.95 million ETH to approximately 12.52 million ETH, representing 21.5%. decrease In their overall position.
With a significant amount of supply entering the market through whale distribution, any sustained move towards the $3,000 level may now depend on a new wave of institutional or retail demand being able to absorb this selling pressure.
Ethereum relative weakness to Bitcoin
Ethereum continues to show signs of weakness compared to Bitcoin, as recent market actions have fostered a more fragile structure in the short term. Cryptocurrency trader KriptoHolder has done so as well male The selling pressure on ETH has intensified, pushing the price action lower towards the $2,273 region.
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At the same time, retail traders remain heavily tilted towards the long side, with approximately 73.19% positioned bullish, while short positions are held at approximately 26.80%, reflecting a crowded trade that often becomes thin during recessions. However, Whales The tick delta currently stands at -22.01, which indicates that the whale side continues to exert significant selling pressure.
According to KriptoHolder, ETH will likely need to see two major shifts: a decline in aggressive selling by whales and a return of purposeful buying in the spot market. supportsBefore a stronger rebound to the upside becomes possible. Right now, ETH appears to be stuck in a more vulnerable position, with market internals showing less resilience than BTC.
Featured image from Getty Images, chart from Tradingview.com
