Ethereum Short Position $700 Million… Many Derivative Investors Expect ETH to Fall

Ethereum (ETH) derivative traders have increased their short positions as altcoins failed to maintain the $3,500 level. This increase in short positions suggests that the majority of traders expect further price declines in ETH. However, do other indicators also align with this sentiment? This on-chain analysis explores whether these traders are making the right judgment or if the data suggests a potential rebound. Ethereum Shorts Overtake Longs... Realizing Profits At the time of writing, the liquidation map shows that Ethereum derivative traders have opened a total of $918 million in short positions following the cryptocurrency price decline yesterday. Opening a long or short position in a trade reflects the trader's expectation of price movement. Opening a long position means believing the price will rise, while a short position indicates an expectation of price decline. Currently, the ETH long positions are valued at around $218 million, while the short positions have surged to $700 million, significantly outpacing the bullish exposure. However, it is important to note that if Ethereum's price rebounds to $3,700, most of the high-leverage positions could be liquidated. However, Glassnode's data suggests that these traders may not face liquidation unless a significant rebound occurs. This is primarily due to the increase in realized profits, indicating that traders have locked in gains by selling or transferring their assets at higher prices. At the time of reporting, Ethereum's realized profits have surged to $659.22 million, implying that most of the short positions have capitalized on the price movement and may be less vulnerable to short-term liquidation. ETH Price Prediction: Can it Recover the $4,000 Level? From November 16th, ETH's price has been trading within an ascending channel. An ascending channel is a chart pattern formed by a resistance line drawn above the price and a support line drawn below the price. This pattern indicates that the price is rising within a defined range. The support line shows the level where the price tends to bounce back up, and the resistance line marks the point where the price faces selling pressure. As can be seen below, ETH has dropped below the $3,314 support line. If the selling pressure intensifies, the cryptocurrency's value could potentially decline to $3,033. However, Ethereum derivative traders should be cautious. If the altcoin does not fall below $3,220, this may not occur. Instead, the value could rise to $3,547 and potentially reach $4,000.