Analysis: Ethereum short positions increased by 40% in a week, up 500% since last November

ChainCatcher news, The Kobeissi Letter stated on X that a new chart from ZeroHedge shows Ethereum is facing record shorting from hedge funds, with the number of CME futures contracts reaching a new high of 11,341. Ethereum's short positions have increased by 40% in a week, growing 500% since November 2024.

It pointed out that Ethereum's history indicates a clear correlation between large short positions and subsequent price crashes. On February 2, ETH plummeted significantly, dropping 37% within 60 hours of President Trump's announcement of tariff policies. It was almost like the flash crash of the stock market in 2010, but without any headlines. This sell-off caused the cryptocurrency market to evaporate over $1 trillion in just a few hours.

Interestingly, even with the increasing short exposure in December 2024, Ethereum's inflows remain high. In just 3 weeks, ETH attracted over $2 billion, setting a record of over $854 million in weekly inflows.

Since the beginning of 2024, Bitcoin's gains have been about 12 times that of Ethereum, creating a gap that has inflated Bitcoin's market cap to six times that of Ethereum, a dominance not seen since 2020.