Ethereum ETH/USD witnessed an unprecedented soar in bearish bets by Wall Avenue hedge funds, limiting the second-largest cryptocurrency’s upside potential.
What Occurred: In an X put up on Sunday, capital markets commentator The Kobeissi Letter highlighted that brief positioning in Ethereum has surged by 40% in only one week and by a staggering 500% since Nov. 2024.
“By no means in historical past have Wall Avenue hedge funds been so in need of Ethereum, and it’s not even shut,” The Kobeissi Letter acknowledged.
The “excessive positioning” has led to Ethereum considerably underperforming Bitcoin BTC/USD, the evaluation concluded.
Certainly, Bitcoin surged over 107% within the final yr, whereas Ethereum grew by a paltry 6%. Moreover, Bitcoin’s market valuation was six occasions greater than that of Ethereum as of this writing
The Kobeissi Letter attributed market manipulation, innocent cryptocurrency hedges, and a bearish outlook on Ethereum as a number of the elements behind the surge in brief positioning.
It warned that such positioning might trigger dramatic crashes, just like the one witnessed final week amid commerce warfare fears, to be extra widespread.
See Additionally: Man Whose $775 Million Bitcoin Fortune Lies Buried In A Landfill Now Needs To Purchase The Trash Heap
Why It Issues: Apparently, whilst brief publicity elevated, inflows into Ethereum exchange-traded funds remained robust. Weekly web inflows stood over $420 million within the final week, greater than double that of Bitcoin, in accordance to SoSo Worth.
Analysts at JPMorgan famous in a current report that elevated competitors from rival blockchains like Solana SOL/USD and different Layer-2 networks has been eroding Ethereum’s market share and threatening its long-term prospects.
Value Motion: On the time of writing, Ethereum was exchanging arms at $2,644.83, down 0.63% within the final 24 hours, in accordance with knowledge from Benzinga Professional.
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