The Ethereum market sees a surge in short positions as the ETH price tests a crucial support level at $3,000. Following Hong Kong’s announcement of spot Ethereum ETFs, Ethereum faces strong selling pressure, trading down by 4.53% as of press time.
According to market analysis by QCP Capital, Ethereum risk reversals have sharply turned negative, registering at -12%. This shift reflects nervous sentiment among investors and traders regarding ETH’s future direction. Additionally, short positions in Ethereum gamma, particularly in near-dated options, indicate potential amplification of price movements.
Despite rising short positions, Ethereum discussion rates are increasing, indicating heightened interest in the asset. However, the ETH/BTC pair shows weakness, with Ether lagging behind Bitcoin’s performance by approximately six percentage points since mid-March.
Factors contributing to Ethereum’s underperformance include competition within the Smart Contract Platforms Crypto Sector and a decline in expectations for spot ETH ETF approval. Perceived odds for approval have decreased by approximately 20% since January, now standing at around 60%.
Technically, the ETH price consolidates in a falling wedge pattern, with a breakout above $3,750 signaling potential long positions. Conversely, a decline below the crucial 100-day Simple Moving Average (SMA) level at $3,023 could extend the downturn, with $2,750 serving as a key support level.
