Since Nov. 20, 2024, short interest in Ethereum has risen by 500%, which raises questions as to whether the looming squeeze on short sellers could help close the performance gap between Bitcoin and Ethereum, despite regulatory backing.
Short interest in Ethereum jumped by an astonishing 40% over the past seven days, taking the cumulative increase since November 20, 2024 to more than 500%. The Kobeissi LetterA leading industry commentary on global capital markets.
Many years ago Ethereum The SEC has received a lot of scrutiny over the past few years, mainly because there was a fear it might be classified as an investment by them. Experts believe this will be unlikely with the Trump Administration’s new regulatory framework. Experts believe that this is not the case. Eric Trump ???????????????????????? posted on X The following are some examples of how to use “it’s a great time to add ETH,” Ethereum experienced a short price surge. Ethereum is still a viable option for investors.ETHIt is facing its most extreme short position ever.
The analysts at The Kobeissi Letter point to a particularly volatile period around Feb. 2, when Ethereum dropped by 37% in just 60 hours on the trade war headlines. In addition, they highlight the strong inflows that occurred into ETH between Dec. 2020 and 2024 despite news reports that hedge fund short positions were being increased. In only three weeks, ETH received over $2 billion, which included a record weekly inflow amounting to $854 million.
Also, traders noted significant increases in Ethereum volume during both the crash of Feb. 3, and Jan. 21, (Inauguration). Despite these high flows, Ethereum’s price remains about 45% under its ATH of Nov. 2021. This is even after a full week.
Hedge funds are aware of the coming changes.
When all these factors are taken into account, analysts of the Kobeissi Letter ask: “What do hedge funds know is coming?” The speculations range from simple bearish views on Ethereum to market manipulation, crypto-hedging and other routine strategies. “However, this is rather strange as the Trump Administration and new regulators have favored ETH,” They wrote it the X post.
As a conclusion, Kobeissi Letter analyst suggest extreme positions in Ethereum’s market will lead to greater price fluctuations, like the ones seen on February 3. They also question whether shorting could be used to close the gap in performance between Bitcoin and Ethereum. Since the start of 2024 Bitcoin outperformed Ethereum about 12 times. Ethereum’s Market Cap has decreased in comparison with Bitcoin. Bitcoin now is 6 times greater than ETH. The disparity is at its highest since 2020.
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Source: crypto.news
