Ethereum Shorts Rekt as ETH Price Keeps Climbing

More than $152 million worth of Ethereum short contracts were liquidated as the price of ETH kept climbing on Wednesday.

At $152 million, the liquidated Ethereum shorts account for more than half of the $251 million worth of crypto shorts that have been rekt in the past day.

ETH traders are going bust at a faster clip than Bitcoin derivatives traders, too. Over the past day, Bitcoin’s more conservative 1.6% gain has left only $34 million worth of liquidated shorts in its wake.

Ethereum was recently up nearly 9% over the past 24 hours to change hands at more than $3,330, according to crypto markets data provider CoinGecko. The price of the second largest digital asset by market capitalization has risen as two companies added significantly to their Ethereum treasuries and amid increased optimism about the underlying network’s usefulness.

Patrick Gruhn, the former head of FTX Europe and now founder of crypto derivatives platform Perpetuals.com, said the ETH price has been particularly sensitive to and  unpredictable due to recent regulatory news.

“This unpredictability has likely contributed to volatility in the crypto markets, evidently primarily for Ethereum—possibly because it’s role as the largest smart contract-enabled blockchain, for which much of this legislation was drafted,” he told Decrypt, “whereas regulatory clarity on Bitcoin was more evident even before the legislation.”

He noted that the Crypto GENIUS Act, Clairty Act and Anti-CBDC Act failed yesterday but then passed in a dramatic standoff on the House floor.

Ethereum trading volumes have jumped 15% in the past day to $132 billion, according to crypto analytics platform Coinglass. That’s enough for ETH to have outpaced Bitcoin’s $109 billion in volume over the last 24 hours. Meanwhile, Ethereum open interest has surged by 9% in the same time period.

Moreover, Glassnode analysts said that as of Wednesday morning, Ethereum was the only top 10 asset—excluding stablecoins—with rising futures volume over the past 24 hours. Ethereum futures volume has grown by 27% in the past day.

“Open interest is also up 6%,” they wrote on X, “while funding remains neutral at 0.0047%—suggestig fresh positioning, but without signs of excessive leverage.”

Open interest is the total value of outstanding futures or options contracts that have yet to be settled. As open interest increases, it indicates that more traders are hedging the market. When open interest falls, it signals that traders feel less certain of an asset’s future price movements.

“Neutral funding” means that the new futures contracts don’t skew heavily bullish or bearish. Futures traders open long contracts when they want to bet that the price of an asset, like ETH, will go up in a set amount of time.

Greg Magadini, director of derivatives at Amberdata, said that for more of the year, the ETH funding levels have not been in neutral.

“The leverage demand for Ethereum was extremely low, and negative for a lot of the year,” he told Decrypt. “April to June was negative, so that tells us that most of the interest was short interest.”

All the ETH frenzy has led BitMEX founder Arthur Hayes to declare this “ETH szn.” He wrote on X that Maelstrom Fund, his venture capital firm, plans to buy “best in class for every DeFi vertical,” adding that they “will all rip if ETH continues outperforming.”