After staying below $2,000 for three days, Ethereum (ETH) finally reclaimed this key level and reached a high of $2,092. At press time, ETH was trading at $2,059 after a slight rise of 0.46% on the daily charts, reflecting increased volatility.
With ETH barely holding above $2,000, whales are turning bearish and aggressively shorting the market.
Ethereum Whales Are Shorting Despite Liquidation Risks
After ETH reclaimed $2,000, a significant number of shorts were liquidated. Data from CoinGlass showed that more than $38 million in short positions were liquidated, compared to $31 million in long positions. Despite the increase in the short sale liquidation rate over the past 24 hours, some whales continued to short the market.
According to Onchain Lens, a whale deposited $4.89 million into HyperLiquid and opened a short position on ETH with 20x leverage. The whale opened its position at 9,887 ETH, worth $20 million. Often, when whales open short positions, it suggests that they are bearish and expecting the market to fall further.
Are whales and retail no longer connected?
Interestingly, even though whales are in a short selling position, their participation in the futures market is minimal. In fact, average futures order size data from CryptoQuant showed an increase and sustained support from retail orders.
Retail traders accumulated around $2.04k and $1.9k, a trend that persisted into March, effectively moving the whales.
Interestingly, their participation over the past three days has been largely on the long side, with derivatives takers buying and selling remaining positive. A positive value here suggests that retailers have taken aggressive positions.
Meanwhile, the altcoin’s Long Short ratio has exceeded 1.008, at press time, averaging 1.7 on Binance and OKX. When the ratio is greater than 1, it implies that most market participants have taken long positions.
This reflects the disconnect between retail traders and whale sentiment in the futures market.
What’s next for ETH?
Ethereum saw relief and recovered $2,000, as short traders rushed to cover their positions. At the same time, demand for long positions has accelerated among small traders.
However, short covering did not allow ETH to make significant gains. As a result, momentum remained bearish, making the rebound short-lived.
Looking at the MACD, the momentum indicator remained negative and was spotted at -19 at the time of writing. A negative MACD suggests that downward pressure has far exceeded any upward pressure.
In fact, Upside Downside Volatility (UDV) further validated this trend, with volatility rising around 2.07 and falling above it to 2.9. This indicates that sellers are more aggressive and downward movements are stronger than upward movements.
Such market conditions signal the likelihood of a further market fall. If overall bearish sentiment continues to dominate, ETH could fall below $2,000 again, with $1.9k as immediate support.
However, if capital flowing into derivatives drives market demand, the altcoin could hold $2,000 and aim for $2,225.
Final Summary
- The Ethereum whale deposited $4.89 million on Hyperliquid and opened a 20x leveraged short position on 9,887 ETH, worth $20 million.
- ETH reclaimed $2,000 as traders rushed to cover their shorts, although bullish momentum remained minimal.
