Ethereum ETH/USD witnessed an unprecedented bounce 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 quick 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 wanting 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 few of the components behind the surge briefly 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 Desires To Purchase The Trash Heap
Why It Issues: Apparently, at the same time as quick publicity elevated, inflows into Ethereum exchange-traded funds remained robust. Weekly internet 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 fingers at $2,644.83, down 0.63% within the final 24 hours, in accordance with information from Benzinga Professional.
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