One look at the technical analysis is all it takes to see how bearish the market has turned. Nothing reflects this better than Ethereum.
According to data from CoinGlass, $ETH The second quarter ended with a decline of 25.28%, extending the first quarter’s decline of 29.26%. This will cause altcoins to drop by nearly 50% in the first half of 2026, leaving holders who bought at the highest prices underwater.
The price structure tells the same story. As the graph below shows, $ETH has lost two major support levels. It fell below $3,200 for the first time in mid-January, and then below the $2,000 level in early June.
Since then, the next base has formed at about $1,500. $ETH has been chopping sideways for over 4 weeks straight.
Now, looking at Santiment’s latest report, it seems that another failure is possible.
According to the report, large Ethereum transfers to CEX typically indicate a higher sell risk, as whales tend to move coins to exchanges before selling, hedging, or rebalancing. However, there is a catch this time.
those $ETH The inflows were also accompanied by strong inflows of stablecoins, suggesting whales are also moving dry powder to exchanges. This indicates that major companies are preparing funds and may buy on the spur of the moment rather than simply releasing funds. $ETH.
And the data is already hinting at where that capital may be moving. Timing appears to be intentional in Ethereum ($ETH) is trading just above a major support zone. A full break below this level could lead to another round of panic selling as more hodlers sink even deeper. But for now, this cycle tells a different story.
Ethereum chop could be a trap for short sellers
Whenever the market freezes in uncertainty, traders tend to set traps.
Looking at Ethereum’s current flows, a value around $1.5 million could be adding pressure to a short squeeze, as many traders are still positioning it to the downside in a broader risk-off environment. but $ETH It is starting to diverge from the rest of the market based on key on-chain signals.
According to CryptoQuant, Ethereum is experiencing a sentiment reset, with negative Coinbase premiums and funding rates, indicating bearish positioning in both the US spot and derivatives markets.
Still, prices have remained stable amid declining currency liquidity. $ETH The influx of staking continues to increase. This creates a “wall of worry” that keeps long-term holders locked in supply while traders remain bearish.
Essentially, Ethereum is in a high-confidence conflict.
This divergence creates a potential trap for short sellers, as significant bearish positioning in derivatives collides with strong holder beliefs. In fact, according to CoinGecko’s Q1 2025 to Q1 2026 cohort study, Ethereum had the highest user retention rate of any major blockchain at 26.2%.
Therefore, with strong retention, increased staking activity, and continued deleveraging, Ethereum’s current chop could pose a risk for those still in short positions.
Final summary
- Ethereum bears’ positions have gotten heavier, but staking and retention remain strong.
- The price has fallen to nearly $1.5 million, increasing squeeze risk.
