Ethereum is facing the largest short positions pressure in history! A rebound could trigger a multi-billion dollar liquidation wave.

The price of Ethereum (ETH) has recently fallen below the $4,300 mark, with volatility sharply increasing. After several weeks of strong rises and reaching multi-year highs, long positions are struggling to hold the key support level between $4,200 and $4,250. Market data shows that ETH is under the largest short positions pressure in history, and once it rebounds, it could trigger a massive short squeeze, resulting in explosive increases in a short period.

The Largest Short Positions in History: A Crisis and Opportunity Coexist

The derivatives market data shows that the short positions leverage for ETH has reached a historic high, reflecting the market's strong bet on a short-term fall.

Analyst Ted Pillows pointed out that this extreme imbalance could become a catalyst for a "perfect storm":

If the rebound is initiated: short positions will be forced to cover at higher prices, triggering a chain liquidation.

Historical cases: Similar situations have previously triggered a pump of 15%-25% in ETH in a short period of time.

Fundamentals remain strong: Institutional holdings and on-chain data support

Despite the short-term pressure on the trend, the long-term fundamentals of ETH remain bullish:

Institutional capital inflow: ETFs, asset management plans, and on-chain accumulation continue to drive up the proportion of institutional holdings.

Exchange supply decreases: More ETH is transferred to cold wallets and staking contracts, reducing market circulation.

Ecosystem Expansion: The growth of DeFi, NFTs, and Layer 2 solutions has solidified ETH's core position in the digital asset space.

These factors provide long-term support for ETH, making it difficult to shake its long-term value even if short-term fluctuations intensify.

Technical Analysis: $4,200 as the Bull-Bear Divide

ETH is currently priced at 4,284 USD, testing the demand zone of 4,200-4,250 USD:

Support level: coinciding with the 100-day moving average (MA), has historically served as a rebounding starting point multiple times.

Resistance level: If the rebound is successful, the primary challenge will be 4,500-4,600 USD, followed by the yearly high of 4,800 USD.

Risk level: A fall below $4,200 may trigger a test of $4,000 or even $3,920 (200-day MA).

The chart shows that the recent red trading volume bars have increased, indicating intensified selling pressure, but long positions are still actively defending the support area.

Short-term Outlook: Short Squeeze May Be the Biggest Variable

If ETH holds at $4,200 in the coming days and experiences a technical rebound, the concentration of short positions will become the fuel for a rapid price rise.

Potential targets: $4,500 → $4,600 → $4,800

Liquidation scale: According to the derivatives open interest data, a breakout above $4,300 could trigger billions of dollars in short positions liquidation.

On the contrary, if the support is breached, it will enter a deeper correction in the short term, and market sentiment may shift to caution.

Conclusion

Ethereum is currently at a moment of intense confrontation between long and short positions: the largest short positions in history contrast sharply with a strong fundamental backdrop. The support level at $4,200 will determine the short-term trend of ETH—if it holds, it is expected to trigger a short squeeze; if it breaks, it may test $4,000. For traders, this is a high-risk, high-reward gamble. For more real-time ETH quotes and technical analysis, please follow the official Gate platform.