Hedge funds have set a new record for shorts against Ethereum on the Chicago Mercantile Exchange (CME), driving these positions to an all-time high.

This development comes as Ethereum struggles to maintain momentum above the $4,000 mark despite a strong influx of funds into spot ETFs and generally bullish market sentiment.

Ethereum Faces Record Short Bets Despite Bullish ETF Inflows

Over the last three weeks, Ethereum ETFs have recorded consistent inflows, amassing over $2 billion in new funds. According to SpotOnChain data, this streak included a record-breaking weekly inflow of $854 million, the highest since the product’s launch. These developments have sparked optimism among some market participants.

However, this inflow of funds has not translated into a significant price rally for Ethereum. Instead, the cryptocurrency’s price performance remains subdued, raising questions among investors.

Analysts attribute this to the increasing net short positions in CME Standard Ethereum Futures contracts, which reached a record 6,349 contracts, according to data from Zerohedge. These short positions are typically used to profit from price declines, signaling a cautious outlook on Ethereum’s short-term potential despite the broader market’s enthusiasm.

While hedge funds

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Author: Oluwapelumi Adejumo