Ethereum's large short positions cause net holdings to surge to $1.32 billion! Can the technical weakness hold the 3400 level?

For days, Ethereum (ETH) has continued to face technical pressure, and the market sentiment is further shaken by shocking news. According to the latest data, the current ETH price is $2.95K, down from the 24-hour high of $2.98K. More notably, on-chain giants are once again heavily shorting, and this move is profoundly rewriting market expectations.

Changes in Market Positions: Major Players’ Net Short Positions Reach New Highs

According to BlockBeats, the short signal has reappeared: an institution borrowed 80 million USDC and subsequently withdrew over 30,000 ETH. As of now, its total holdings have risen to 385,000 ETH, worth approximately $1.32 billion.

What does this transaction imply? On-chain data shows that when institutional-level short positions are so large, they often trigger a domino effect in the market. Retail traders follow suit, hedge funds adjust their positions, liquidity comes under pressure—these chain reactions can erupt in a short period, posing a substantial threat to price stability.

Technical Outlook: Triple Pressure Approaching Critical Point

From the 1-hour chart, Ethereum’s current situation can be described as facing three fronts:

Neckline Resistance Difficult to Break: The 3500 level has become the ceiling for this rebound. This position was once a watershed between bulls and bears, but now it has turned into a strong resistance. Even if a breakout occurs, it’s unlikely to hold; further resistance at 3588 is even more distant.

Support Weakening and Wavering: The 3400 support line has not been broken, but its capacity is diminishing. Volume and technical indicators both show that selling pressure still dominates. If this line is lost, the next support will retreat to around 3360, with a downside potential of over 1.2%.

Clear Bearish Signal from Indicator Linkage: MACD is operating below the zero line, and volume structure continues to show downward momentum. Any current rebound is more like a chance to reduce positions at a high rather than a bottom-building signal.

Market Sentiment and Risk Assessment

From a macro perspective, the combined shorting pressure on the chips side and the technical weakness form a reinforcing negative feedback loop. Against this backdrop:

If the price can break through 3500 with volume and stabilize, there is a theoretical possibility of testing 3588. However, considering the current scale and resolve of the shorting funds, the probability of such an upward move being fully exhausted is relatively limited.

A more logical progression is: a rebound near 3500 encounters resistance and then declines again. Once the 3400 support is broken, 3360 will become the next key battleground.

Practical Trading Guide: How to Respond to the Current Situation

For investors with existing positions: Any rebound near 3500 should be seen as an opportunity to reduce holdings. Under such obvious short pressure, protecting capital always takes precedence over chasing rebounds. It is recommended to gradually lighten positions during rebounds.

For observers: Patience is advised until signs of stabilization around 3360 are confirmed. After confirmation, consider small-scale positions, employing a phased entry strategy, and strictly controlling position sizes.

Core risk management: Regardless of the strategy, setting stop-loss orders is essential. The current market volatility has intensified, and stop-losses are not only risk tools but also the last line of defense for capital preservation. Markets change rapidly; timely stop-losses can often turn danger into opportunity.