- ETH short positions are rising rapidly among traders
- Price is closing in on the $3700–$3800 magnet zone
- A potential short squeeze could lead to a sharp move up
Ethereum traders, especially leveraged “degens,” are heavily increasing their short positions, betting that the price of ETH will drop soon. However, this surge in bearish sentiment comes at a time when Ethereum is climbing towards a key resistance zone between $3700 and $3800.
This type of positioning could be risky. When too many traders short the market, a sudden price spike can trigger liquidations — a phenomenon known as a short squeeze — which can send the price soaring even higher.
The $3700–$3800 Magnet Zone Explained
In technical analysis, a magnet zone is a price area that tends to attract the market. Currently, ETH is hovering near $3700, and analysts say $3800 could be the next logical stop if momentum continues.
This level may be significant due to historical resistance and liquidity zones where a large number of orders are placed. If Ethereum breaks above $3700 with volume, it could quickly pull toward $3800 — especially if those betting against it are forced to close their positions.
Will a Short Squeeze Fuel More Upside?
With short positions at a high, Ethereum is in a position where any positive news or a sudden upward move could lead to a cascade of short liquidations. This could cause a spike in price as traders scramble to exit bearish bets.
While short-term traders are banking on a pullback, long-term holders may see this as a bullish setup. The market sentiment can change rapidly, and over-leveraged positions only add fuel to the volatility.
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