The second-largest cryptocurrency, Ethereum, is facing significant pressure from hedge funds, with short positions surging by 500% since November 2024. This rise in bearish bets has caused Ethereum's price to decrease and currently sits at around $2,500, down 2% in the last 24 hours. Hedge funds seem to be predicting further price declines for Ethereum, raising concerns about market volatility. There is a possibility of a short squeeze if short-sellers are forced to buy back the asset, potentially driving prices higher. Ethereum's slow performance compared to Bitcoin has led to a significant gap between the two cryptocurrencies, with Bitcoin's market cap now six times larger than Ethereum's. Ethereum's high gas fees and impact on Layer-2 network performance are also viewed as critical issues, with some suggesting the adoption of SHIB as a gas token to reduce costs. Ethereum must overcome these challenges and positive developments to compete with Bitcoin and improve its long-term outlook.



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