Ethereum is experiencing a notable shift in derivatives positioning as high-leverage long positions decline sharply across the market. The reduction suggests that many overly aggressive bullish trades have either been closed voluntarily or forced out through recent liquidation events.
Could Ethereum Be Preparing For A Short Squeeze Next?
Crypto investor and data analyst known as CW on X pointed out that Ethereum is going through a significant deleveraging phase as high-leverage long positions continue to decline significantly across the market. At the same time, short positions have increased slightly, indicating that the market is not yet heavily crowded on the bearish side.
Related Reading
The overall scale of high-leverage exposure remains relatively low, suggesting reduced systemic risk compared to earlier phases. Furthermore, most of the greedy long positions have already been liquidated, with the next attention now shifting toward short position liquidations.
Amid this market phase, Ethereum whales are showing a behavior not seen in over a year, potentially signaling a major shift in market dynamics. An analyst known as Ali Charts has revealed that since October 6, 2025, wallets holding between 1,000 and 10,000 ETH have undergone a significant regime change in their market behaviour.
Before this shift, this cohort was in a steady accumulation regime. Between April and October 6, 2025, their holdings climbed from approximately 12.95 million ETH to nearly 15.95 million ETH. However, that trend has now reversed sharply.
Since October 6, holdings for these mid-tier whales have decreased from 15.95 million ETH to roughly 12.52 million ETH, representing a 21.5% decline in their total position.
With a sizable amount of supply entering the market through whale distribution, any sustained move toward the $3,000 level may now depend on a fresh wave of institutional or retail demand capable of absorbing that selling pressure.
Ethereum Relative Weakness To Bitcoin
Ethereum continues to show signs of weakness relative to Bitcoin, with recent market action reinforcing a more fragile short-term structure. Crypto trader KriptoHolder has also noted that selling pressure on ETH has intensified, pushing price action lower toward the $2,273 region.
Related Reading
At the same time, retail traders remain heavily skewed to the long side, with approximately 73.19% positioned bullish, while short holding positions at around 26.80%, reflecting a crowded trade that often becomes vulnerable during downturns. However, the Whales vs Retail Delta currently sits at -22.01, showing that the whale-side continues to apply significant selling pressure.
According to KriptoHolder, ETH would likely need to see two major shifts: a reduction in aggressive whale-side selling and the return of meaningful spot market buying support, before a stronger rebound to the upside becomes possible. For now, ETH appears stuck in a more vulnerable position, with market internals showing less resilience than BTC.
Featured image from Getty Images, chart from Tradingview.com
