Short Position on ETH Reaches All-Time High

According to the latest data, the volume of leveraged short positions on ETH has set a new record, indicating that many investors are betting on a decline in Ethereum’s price. However, this excessive concentration could create unexpected liquidation scenarios.

Potential Liquidation Scenarios

Analysis from experts and data from Coinglass suggest three possible scenarios:

• Bullish Scenario: If ETH rises by $400 from its current level, the total liquidation value could reach up to $4.5 billion. This figure reflects the large scale of short positions currently “floating” in the market.
• Bearish Scenario: Conversely, if ETH drops by $400, the expected total liquidation would be around $1 billion—indicating that long positions (buying) are significantly less risky.
• Breakout Scenario: Notably, if ETH reaches an all-time high (ATH) this week, the total liquidation value could soar to $10 billion.

Related: 4 Reasons Why Chainlink Could Hit $50 This Year

Market Awaits a “Squeeze”

The current situation is described by analysts as a “squeeze” that has been set up. With a clear imbalance between short and long positions, the market is waiting to see which side will suffer losses first.

Experts advise investors to exercise caution in this context, as volatility can occur rapidly and intensely. Risk management and closely monitoring market conditions are deemed essential during this sensitive phase.