Ethereum News Today: Trader Doubles Down on $171M Ethereum Short as $3.6K Liquidation Level Looms

Large ETH Short Position Signals Growing Correction Expectations in Crypto Market

A high-stakes Ethereum short trade has drawn attention as a single trader continues to expand their position to 50,000 ETH, valued at approximately $171.7 million. This move indicates a strong bearish sentiment, with the trader setting a liquidation level at $3,634. As of the latest data, the position is still active with an unrealized profit above $10 million, suggesting confidence in Ethereum’s potential downward movement [1].

Ethereum’s price trajectory has shown significant volatility over the past month, climbing from $2,400 to nearly $4,000 in three weeks before retreating to around $3,200. The initial surge coincided with heavy exchange outflows, particularly from July 17 to July 24, when multiple outflows exceeded $100 million. This phase aligned with rising investor confidence and reduced immediate selling pressure as large amounts of ETH were being moved off exchanges [1].

However, the bullish momentum reversed around July 28 when inflows began to dominate, peaking at a $150 million spike. This marked a shift in behavior, with major holders moving assets back onto exchanges, potentially in preparation for selling. The price drop to $3,200 followed this trend, as the inflow data suggested increasing selling pressure. Despite the decline, some outflows persisted, indicating that long-term holders were not entirely exiting the market [1].

Ethereum has since retested a three-year downtrend as a potential support level, with sentiment remaining divided between further downward movement and a possible rebound. The ongoing tension between bullish accumulation and bearish distribution is evident in the mixed netflow patterns, with green inflow bars dominating in recent days. These inflows, especially those exceeding $100 million, are often precursors to major price movements [1].

The trader’s growing short position is one of the key factors influencing market sentiment. The proximity to the liquidation level adds a layer of uncertainty, as any significant price reversal could trigger a large-scale unwind of the position. Analysts have noted that such large shorts can act as market indicators, with their outcomes often shaping broader market dynamics.

Ethereum’s ability to hold above $3,000 despite the selling pressure suggests there is still underlying demand and strong hands in the market. The mixed inflow and outflow patterns reflect the ongoing tug-of-war between short-term sellers and long-term holders, with neither side gaining a clear advantage so far [1].

The recent price action highlights the complex interplay of market structure and trader behavior. As the market retests key levels, the outcome of the large ETH short position could provide further clarity on Ethereum’s near-term direction.

Source: [1] Trader Doubles Down on $171M Ethereum Short as $3.6K Liquidation Level Looms (https://cryptofrontnews.com/trader-doubles-down-on-171m-ethereum-short-as-3-6k-liquidation-level-looms/)