Ethereum (ETH) is currently in a phase of consolidation, with its price hovering between $2,700 and $2,600 for the past few days. Despite the limited price movement within this range, there has been a notable increase in activity within the Ethereum derivatives market, particularly with short sellers taking larger positions.
Ether ETPs have seen a surge in inflows, surpassing Bitcoin ETPs in the past week. According to data from Coinglass, Ethereum experienced liquidations totaling around $45.64 million, with buyers liquidating approximately $28.46 million worth of positions. This influx of funds into Ether ETPs comes amidst a 95% increase in inflows compared to Bitcoin ETPs, attracting a substantial $793 million.
The rise in Ether ETP activity coincided with a drop in ETH’s price below $2,700 on February 6, leading to significant buying on weakness. This marks the first time in 2025 that Ether ETPs have outperformed Bitcoin ETPs in terms of inflows.
However, despite the positive ETP activity, there has been a notable increase in short positions on Ethereum, with hedge funds ramping up their bearish bets on the altcoin. Short positions in Ethereum have surged by 40% in just one week and by 500% since November 2024, surpassing any previous records.
One factor contributing to the bearish sentiment towards ETH is the overall declining trend of the network, with a noticeable decrease in activity. The Total Value Locked (TVL) in decentralized finance (DeFi) has fallen to a low of $56.8 billion in February, signaling a decline in network usage.
Looking ahead, the price of Ethereum is facing resistance around $2,700, resulting in a consolidation phase. Currently priced at $2,677, ETH has seen a 2.1% increase in the last 24 hours. If the price can hold above $2,700, buyers may push for a move towards $3,000 and potentially settle around $3,200.
However, if ETH rejects the declining trend line, a strong correction may occur, leading to a bearish consolidation towards $2,500. The RSI trend line hovering below the midline suggests continued buying demand towards the $2,700-$3,000 range. Overall, the Ethereum market is experiencing a mix of bullish and bearish signals, with traders closely monitoring price movements for potential opportunities.