This has created question marks as to whether the performance difference with Bitcoin can be closed with a Short Squeeze, despite the regulatory support.

According to The Kobeissi Letter, one of the leading global capital markets commentators of the sector, the last week has increased as remarkable of open short positions in Ethereum by 40 %, reaching a total increase of 500 %since November 2024.

For many years, Ethereum was under investigation due to the possibility of classification of the US Securities and Stock Exchange Commission (SEC) as securities. However, in a changing regulatory environment with the Trump administration, it is thought that this is no longer possible.

In fact, Eric Trump recently shared a “great time to add ETH” on the X platform, causing a short -term rise in the Ethereum price. However, despite this regulatory change, Ethereum faces the highest short positioning levels ever seen.

The Kobeissi Letter analysts point to a period of volatil around 2 February. In this process, they say that Ethereum lost 37 %in just 60 hours due to the news of trade war.

However, in December 2024, despite reports that hedge funds increased short positions, strong capital inflows of Ethereum were seen. Within only three weeks, ETH had more than $ 2 billion funds entry and a record -breaking -on -week -old entrance to an $ 854 million entrance.

In addition, it is emphasized that there are significant leaps in the transaction volume of Ethereum. Especially during the presidential oath ceremony on January 21 and the collapse on February 3, volumes were increased sharply. However, despite the high fund inputs, the Ethereum price is difficult to recover.

In November 2021, the highest level of all time (AD) is still traded below 45 %. In the light of all these developments, The Kobeissi Letter analysts said, “What do the hedge funds know?” raises the question.

Analysts focus on possible scenarios such as market manipulation, usual crypto risk protection strategies, or a simple decline expectation for the future of Ethereum. “However, this is quite strange, because the Trump administration and new regulators approach ETH positively,” they state.

The Kobeissi Letter analysts predict that excessive positioning in Ethereum can lead to major price fluctuations on February 3. They also question if a Short Squeeze can close the performance difference between Bitcoin and Ethereum.

Since the beginning of 2024, Bitcoin has performed about 12 times better than Ethereum. Moreover, Ethereum’s market value continues to shrink compared to Bitcoin, and now the market value of the BTC has reached about six times the ETH. This is the greatest difference between the two beings since 2020.