Short positions have increased after Grayscale withdrew its application for an Ethereum futures ETF.
Bearish sentiment reigns in the market, which could lead to further declines.
#CryptoWatchMay2024 [ETH], the second-largest cryptocurrency by market capitalization, has no significant upward momentum, unlike the recent rise of #CryptoWatchMay2024 [BTC].
Although the ethereum exchange rate broke the $4,000 mark in March, it failed to reach an all-time high, unlike Bitcoin, which reached a new high during the same period.
Over the past two weeks, the ethereum exchange rate has fallen by almost 10% and this trend has continued over the past 24 hours, dropping by 2.2%.
This bearish sentiment is reflected in the behavior of Ethereum traders, who have increased their short positions, especially after the significant developments with Grayscale Investments.
Grayscale Investments recently withdrew its application for an ethereum futures exchange-traded fund (ETF), and the move has had a significant impact on trader sentiment.
The decision came just three weeks before the U. S. Securities and Exchange Commission (SEC) issued its verdict, which led to an increase in short positions on Ethereum.
Traders are now betting on a further fall. If prices rise by just 4%, $358 million worth of short positions could be liquidated.
Conversely, a 4% drop would result in the liquidation of $237 million worth of long positions.
This withdrawal is in line with broader concerns about Ethereum's regulatory status, particularly its classification as a security and the fate of Ethereum ETFs.
As the May 23 decision date approaches, analysts and market participants are increasingly skeptical of the approval of these ETFs.
According to Polymarket, more than 90% of participants believe the spot for Ethereum ETFs will be rejected.
What's going on with Ethereum?
Source: glassnode.
Read the Ethereum [ETH] price forecast for 2024-2025.
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