Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesStocksEarnInstitutionAI & More
Ethereum’s short squeeze fades as on-chain data points to renewed distribution

Ethereum’s short squeeze fades as on-chain data points to renewed distribution

AMBCryptoAMBCrypto2026/07/06 19:36
By:AMBCrypto

Ethereum [ETH] has rallied 11.7% over the past week, but it is possible that short-term holders were preparing to exit the market.

Ethereum’s short squeeze fades as on-chain data points to renewed distribution image 0 Source: Glassnode

The exchange net position change had been negative since mid-May, but posted a positive bar on its histogram on Sunday, July 5.

Negative net position change implies a net outflow of assets from exchange-affiliated addresses. A shift toward positive indicates that net inflows were greater in volume.

@media only screen and (min-width: 0px) and (min-height: 0px) { div[id^="bsa-zone_1774359638628-7_123456"] { min-height: 50px; transition: min-height 0.3s ease; } } @media only screen and (min-width: 640px) and (min-height: 0px) { div[id^="bsa-zone_1774359638628-7_123456"] { min-height: 90px; } }
AD

This inflow can be interpreted as readiness for selling from holders, though it need not provide an immediate bearish price reaction.

Recently, AMBCrypto pointed to a discrepancy between trader and developer activity. Alongside the monthly TD Sequential buy signal, bulls had hopes of a move toward $2,000.

That optimism faded as Bitcoin [BTC] faced rejection from the $63k area, unable to assail the $64k local supply zone in earnest. This rejection has caused an Ethereum price slide below $1,800.

Ethereum bullish hopes misplaced?

Ethereum’s short squeeze fades as on-chain data points to renewed distribution image 1 Source: CryptoQuant

Crypto analyst Darkfost drew attention to the severe decline in Open Interest. From a record high of $33.9 billion in October 2025, to just $11.2 billion, the corrective leg of the cycle has shaken market conviction.

Examining the liquidation volume bubble map showed a high volume of long liquidations towards the end of June, rivaling the size of the October long liquidations.

Ethereum’s short squeeze fades as on-chain data points to renewed distribution image 2 Source: CryptoQuant

The Coinbase Premium Index has been negative since late April, another sign of bearish market sentiment. U.S.-based investors have not been taken in by the recent price bounce toward $1.8k.

The large volume of short liquidations showed that many traders had been positioned for further downside before the recent rally forced them to exit. A small corrective bounce amid a wider downtrend has caused $314.5 million in short liquidations so far in July.

Ethereum’s short squeeze fades as on-chain data points to renewed distribution image 3 Source: Glassnode

The Ethereum holder accumulation ratio tracks the proportion of active users who are increasing their holdings, compared to those who are decreasing. Lower ratios indicate bearish momentum, and tend to mark periods of distribution and profit-taking.

The drop in the holder accumulation ratio since May suggested the current distribution has not ended.

Final Summary

  • Ethereum was up by 11% over the past week of trading, triggering over $300 million in liquidations within a week.
  • Other onchain metrics showed that the current distribution trends were likely to cause a deeper ETH price slide.

 

0
0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

Understand the market, then trade.
Bitget offers one-stop trading for cryptocurrencies, stocks, and gold.
Trade now!

You may also like

Morgan Stanley trading desk, dubbed the "most accurate in the past two years," turns bullish

The supporting logic encompasses five major pillars: unexpected macro trends, consumer resilience, low profit expectations, stabilized yields, and technical improvements. Since the previous shift on August 31, the Nasdaq 100 long and Russell 2000 short paired trades have accumulated gains of over 8%. This latest "bullish reversal" is even more convincing. Strategically, technology remains the core long position, but the hedging tool has shifted from shorting RTY to derivatives. Meanwhile, the risk of long-term interest rate hikes still persists.

华尔街见闻•2026/09/30 00:16
Morgan Stanley trading desk, dubbed the "most accurate in the past two years," turns bullish

As the FSD experience leaps forward and Optimus rushes toward mass production, a $30 billion standby credit facility offers strong support! Tesla (TSLA.US) accelerates Elon Musk's "physical AI master plan"

Tesla has secured $30 billion in new loans and credit lines as the electric vehicle manufacturer is ramping up its investments in artificial intelligence and robotics technology.

智通财经•2026/09/29 23:56