Short sellers are betting Ether's price will go down (they borrow Ether, sell it, then aim to buy it back later at a lower price to pocket the difference).
Grayscale withdrawing its Ether futures ETF application might be seen as bullish for Ether by some investors, potentially causing the price to rise.
If the price goes up significantly, short sellers will be forced to buy Ether back to avoid further losses, which can actually drive the price up even more in a domino effect called a short squeeze.
A 3% rise in price could wipe out $345 million in short positions, indicating a significant amount of short selling activity. This makes a short squeeze more likely if the price starts to rise.
Here are some things to consider:
This is a short-term situation and the cryptocurrency market is volatile.
Even a small price increase might not trigger a full-blown squeeze.
Other factors can still influence Ether's price.
It's important to do your own research before making any investment decisions.