Hedge funds have ramped their short positions on Ethereum, setting a new record on the Chicago Mercantile Exchange (CME).

This surge in short bets comes despite a notable increase in capital flowing into spot Ethereum exchange-traded funds (ETFs).

Over the past week, the nine US spot Ethereum ETFs saw net inflows of $420.06 million, significantly outpacing the $204 million inflows recorded by their Bitcoin counterparts.

However, the increased capital failed to drive ETH’s price higher. Instead, the asset remains under pressure—falling by around 20% in the past month to $2,657 as of press time, according to CryptoSlate’s data.

This declining price trend has raised concerns about Ethereum’s short-term outlook.

Market analysts have pointed to a direct correlation between ETH’s weak performance and a sharp increase in hedge fund short positions. Over the past week, these positions have spiked more than 40%, marking a staggering 500% surge since November 2024.