Record ETH Shorts And Staking Surge Fuel ETH Supply Shock

According to BeInCrypto, ETH is experiencing a significant supply shock driven by multiple factors: over 29% of ETH is locked in staking, drastically limiting the available circulating supply; meanwhile, leveraged short positions on ETH have reached record highs as hedge funds engage in basis trades, shorting futures while holding spot ETH to earn yields.

Also, large ETH withdrawals by whales from exchanges are further tightening liquidity, which raises the possibility of a short squeeze and a strong price rally.

Despite this bullish potential, there are risks involved, if volatility spikes unexpectedly, similar to the 2020 “Black Thursday” crash, hedge funds could face forced liquidations.

Source: BeInCrypto