Ether Faces Pressure as Short Positions Increase Amid $2,000 Support Test

Ether (ETH) is experiencing downward pressure after failing to reclaim the $2,150 resistance level. According to Cointelegraph, despite this decline, ETH's aggregate open interest has risen by approximately 350,000 ETH, indicating the entry of new short positions into the market. With over $1.5 billion in bearish positions clustered above $2,150, a successful defense of the $2,000 support zone could potentially trigger a sharp short squeeze and a relief rally for ETH. The resistance level of $2,150 has been a significant barrier for ETH since it dropped below this mark on May 17. This level had previously capped the price from February to April, preventing a strong breakout. As the price consolidates near $2,000, crypto trader Ardi commented, "Sub-$2,000 is coming for ETH shortly. We've already seen a -20% correction from the range highs, and the price is now completely outside the ascending channel." ETH futures data reveal a more complex setup during the current dip, with aggregated open interest climbing by roughly 350,000 ETH over the past day, even as the price trended lower to $2,060. This divergence between price and open interest suggests fresh short positions are driving the price lower, rather than long liquidations. Aggregated funding rates have remained strongly positive at 0.0049% this month, indicating that traders are still paying to maintain long exposure despite falling prices. The combination of rising open interest and positive funding implies aggressive positioning on both sides for the time being. This scenario could lead to a liquidity hunt on both sides, with $2,000 standing out as the nearest pivot zone. The data on long-leveraged positions-at-risk exceeds $1 billion, making it a critical level for short-term direction. This setup leaves ETH open to a potential short squeeze, where a successful defense of $2,000 could force shorts to cover into the liquidity pocket above $2,150, where more than $2.1 billion in short-term liquidity is concentrated, potentially leading to a relief rally. Ether has steadily lost participation from mid-sized holders since 2023, reflecting weak conviction among retail investors. Wallets holding between 100 and 1,000 ETH controlled roughly 16.2 million ETH during the 2023 peak, but that figure has since dropped to around 8.75 million ETH. Meanwhile, larger investors played a key role in Ethereum’s 2024 rally, with holdings among addresses with 1,000–10,000 ETH rising to 15.8 million from 12.4 million ETH before distribution began in October 2025. As of May 25, balances in this cohort had fallen back to 12.7 million ETH, indicating reduced exposure after the rally. However, Ether’s largest holders continue to accumulate aggressively, with ETH wallets holding between 10,000 and 100,000 ETH increasing their balances by nearly 30% over the past year, rising to 19 million ETH from 14.7 million ETH. This trend suggests that mega-whales continue absorbing ETH supply even as participation from mid-sized holders declines.