The post Analyzing the status of Ethereum’s short squeeze and what it means for you appeared on BitcoinEthereumNews.com.

Ethereum’s CME short pressure eased as arbitrage trades unwinded, reducing structural drag on the price ETH’s fundamentals remain strong, but fresh catalysts are needed to ignite a sustained breakout Ethereum [ETH] may still be waiting on a macro spark to rally; but the structural weight that’s been dragging it down is finally easing. The massive short positions opened on CME Ethereum Futures late last year, driven by arbitrage trades exploiting a sky-high basis, have now been largely unwound. While not an outright bullish trigger, this cleanup removes a key source of market pressure, resetting the stage for a potential breakout. If the right catalysts emerge. Structural strength, stalled price AMBCrypto recently reported on Ethereum’s resilient fundamentals – Rising whale accumulation, strong DeFi dominance with over $190 billion in TVL, and a historically undervalued MVRV Z-Score. On-chain data pointed to growing network activity and early signs of re-accumulation, hinting that ETH could be gearing up for a reversal. And yet, despite these signals, the price action has remained muted. One overlooked reason? A wave of short futures positions on CME. Not out of bearish conviction, but as part of a massive arbitrage trade. That structural pressure may now be fading and it could change things. Mechanics behind the short pressure Source: Cryptoquant In November 2024, Ethereum’s CME Futures basis surged past 20%, creating a textbook arbitrage opportunity. Traders – mostly institutional – capitalized by buying spot ETH, often via ETFs, while simultaneously shorting CME Futures. This wasn’t a directional bet against Ethereum. but a structured arbitrage trade exploiting the premium between Futures and Spot markets. As the data revealed, this period saw an aggressive spike in the annualized basis. Once macro factors hit, the trade began to unwind, dragging spot ETH down as arbitrageurs exited. With the basis now around 4-5%,…

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Filed under: News - @ April 22, 2025 5:23 am