The risk of ether compression increases when shorts are crowded around $2,000
Ether (ETH) remains under pressure after failing to regain the $2,150 resistance level. Despite the decline, total ETH open interest increased by about 350,000 ETH, suggesting that new short positions are entering the market.
With more than $1.5 billion in breakout positions above $2,150, a successful defense of the $2,000 support zone could trigger a sharp short squeeze and support rally for ETH.
The crowded ETH trade could result in a relief rally.
ETH failed to recover $2,150 after dropping on May 17. The resistance increased the price from February to April, limiting the strong signal.
As the price nears $2,000, crypto trader Ardi said:
“Sub-$2,000 for ETH is coming soon. We've seen a -20% correction from the high range, and the price is now completely out of the bullish channel.”
ETH/USD, One Day Chart Analysis by RD. Source: X
ETH futures data shows a more subdued setup during the current dip. Total open interest increased by about 350,000 ETH on the previous day, although the price dropped to $2,060. The difference between price and OI indicates hot short positions rather than long liquidity, which drives the price lower.
Composite funding rates remained very positive this month at 0.0049%, indicating that traders are still paying to maintain long-term exposure despite falling prices. The combination of high demand and positive funding suggests an aggressive stance on both sides for the time being.
ETH price, funding rate and open interest. Source: Velo Chart
This can create liquid hunting on both sides. $2,000 is highlighted as a near pivot zone. Long-term leveraged exposure data exceeds $1 billion, making it critical for short-term direction.
That setup leaves ETH open for a short-term squeeze. A successful resistance of $2,000 could force shorts to cover the liquid pocket above $2,150.
ETH liquidity map. Source: CoinGlass
Related: Tom Lee Predicts Supercycle in 2026 Amidst Bitcoin's Biggest Ethereum Buyout
ETH retail participation is decreasing
Since 2023, Ether has lost participation from mid-sized holders, reflecting weak confidence among retail investors. Wallets holding between 100 and 1,000 ETH will be available in 2018. They controlled 16.2 million ETH at their peak in 2023, but that figure has since He came down Around 8.75 million ETH.
Ether balance by holding value. Source: CryptoQuant
Meanwhile, big investors have played a key role in the Ethereum 2024 rally. Addresses with 1,000–10,000 ETH rose from 12.4 million ETH to 15.8 million before the distribution began in October 2025. On May 25, this group's balance fell to 12.7 million ETH, reducing exposure after the rally.
However, large containers of ether continue to accumulate significantly. ETH wallets holding between 10,000 and 100,000 ETH have grown their balances by about 30% over the past year, rising from 14.7 million ETH to 19 million ETH. The trend suggests that mega-whales will continue to supply ETH despite declining participation from mid-sized holders.
Related: Ethereum Bull David Hoffman Explains Why He Sold His ETH
