Ethereum's Shifting Momentum: Can Bulls Reclaim Ground After Massive Short Liquidations?

Ethereum's price action in November 2025 has painted a volatile and contradictory picture for investors. While the asset remains trapped in a narrow range between $2,659 and $3,479, the underlying market structure and sentiment dynamics suggest a potential inflection point. With over $531 million in short liquidations at risk if the price breaks above $2,900 and $988 million in long liquidations threatened below $2,700, the battlefield for control of Ethereum's near-term trajectory is intensifying. This analysis examines whether bulls can capitalize on these structural imbalances to reclaim momentum, or if macroeconomic headwinds will continue to stifle recovery.

Short Liquidations and the Fragile Equilibrium

The recent surge in short liquidations-peaking at $531 million-highlights a critical concentration of bearish positioning above $2,900. This level coincides with a key resistance zone identified at $2,886 and $3,166, where historical price action has repeatedly stalled Ethereum's upward momentum. Conversely, long liquidations of $988 million below $2,700 underscore the fragility of bullish sentiment in a market already in capitulation, as evidenced by a Net Unrealized Profit and Loss (NUPL) ratio of 0.23.

The normalization of Ethereum's funding rates from +0.03% to near 0% suggests excessive leverage has been purged from the system, a necessary precondition for a sustainable bullish reversal. However, the decline in open interest short exposure-down 7% week-on-week to $6.7 billion-indicates that institutional and retail participants are cautiously recalibrating their risk profiles. This reduction in leverage could act as a double-edged sword: while it reduces the risk of cascading liquidations, it also signals a lack of conviction among aggressive bearish actors.

Market Structure and the Path to Recovery

Ethereum's on-chain market structure reveals a mixed picture. The asset is currently trading near $2,900, a level that sits just below the $2,900–$3,166 resistance cluster. Breaking above this range would not only trigger the aforementioned short liquidations but also test the psychological threshold of $3,000, a level last breached in early 2025. Below, the $2,750 and $2,659 support levels form a critical defensive line for bulls. A failure to hold above $2,659 could force the price toward $2,500, a level that would likely reignite panic selling.

Trading volume data adds nuance to this analysis. Ethereum's 24-hour volume of $22.49 billion suggests sufficient liquidity to absorb moderate price swings, but the asset's dominance in institutional-grade smart contract deployment-bolstered by $7.4 billion in real-world asset tokenization-provides a foundational floor for long-term value. Meanwhile, Lido's staked ETH surpassing 8.95 million reinforces network security and lock-up stability, countering bearish narratives about Ethereum's utility.

Macro Headwinds and Sentiment Reversal

The broader macroeconomic environment remains a headwind. Rising U.S. yields, cooling ETF inflows, and a cautious institutional rotation toward Treasury-linked yields have tightened liquidity across crypto markets. This has been exacerbated by a sharp unwind of leveraged long positions in perpetual futures, where even minor price movements have triggered large-scale liquidations.

Yet, within this bearish backdrop, subtle signs of sentiment reversal are emerging. The ETH/BTC ratio hitting a seven-month low of 0.052 reflects a temporary flight to Bitcoin as a "safe haven" in volatile conditions-a classic precursor to risk-on rotations in crypto cycles. Additionally, Ethereum's stable burn rate of 1,500 ETH/day and consistent on-chain transaction volume (1.05 million daily) suggest that fundamental usage remains intact, even as speculative fervor wanes.

The Bull Case: Conditions for a Rebound

For bulls to reclaim ground, three conditions must align:
1. Breakout Above $2,900: A sustained close above this level would trigger short liquidations and invalidate the current bearish narrative.
2. Macro Stabilization: A pause in U.S. yield hikes or a resurgence in ETF inflows would alleviate liquidity pressure.
3. Institutional Re-entry: Ethereum's strong fundamentals in smart contract deployment and tokenization could attract capital back into the asset.

However, the path is fraught with risks. A breakdown below $2,659 would likely trigger a cascade of long liquidations and force Ethereum into a deeper bearish phase.

Conclusion

Ethereum's shifting momentum hinges on its ability to navigate the $2,900–$3,166 resistance cluster without succumbing to macroeconomic pressures. While the current market structure favors a bullish reversal-supported by concentrated short liquidations and resilient on-chain fundamentals-the broader environment remains hostile. Investors must closely monitor the $2,659 support level and the ETH/BTC ratio for early signals of a sentiment shift. In the absence of macroeconomic relief, Ethereum's bulls face an uphill battle to reclaim ground, but the structural imbalances in the market suggest that a breakout, if it comes, could be explosive.