Ethereum Price Squeeze: Can Shorts Survive $4.3K Breakout?

Key Insights:

• Ethereum price up 20.6% in a week, with whales accumulating 221,000 ETH, reducing sell-side liquidity.
• Shorting Ethereum faces a squeeze, with clustered stops at $4,300–$4,400 and strong spot/OTC demand keeping price resilient.
• Support at $4,050–$4,100 means only a drop below $3,950 would open a safer short entry.

Ethereum price has jumped 20.6% over the past seven days, breaking through multiple resistance levels in a steady uptrend. Despite this, a surprising number of traders are still shorting Ethereum, betting on a price drop. That’s the beauty (and danger) of the crypto market: it often moves in ways that punish the majority.

Right now, the ETH price setup makes shorting Ethereum one of the riskiest strategies out there.

Futures Pain Trade and Whale Accumulation Fueling Ethereum Price Squeeze

Liquidation maps show a dense cluster of short stop losses sitting between $4,300 and $4,400. Every time the ETH price enters this range, short positions are liquidated, triggering buy orders that push the price even higher;  a classic short squeeze.

Even though a bigger chunk of the derivatives are positioned long, with over $6 billion worth of longs, short positions on Bitget alone pose a sizeable short squeeze risk.

Whales have been adding to this pressure. One large entity accumulated 221,000 ETH (worth around $947 million) in just a week via FalconX, BitGo, and Galaxy Digital. These spot purchases reduce sell-side liquidity, forcing shorts into a corner with fewer opportunities to exit.

Some large traders are trying to defend their shorts by topping up millions in USDC margin to delay liquidation. But with Ethereum steadily grinding upward, these defensive plays have only delayed the inevitable for many high-leverage short positions are getting wiped out.

Spot & OTC Demand Keeps Ethereum Price Resilient

Even when funding rates, the cost of holding long positions in the futures market, briefly reset, ETH quickly bounces back from dips. This points to strong spot market demand and persistent short covering rather than exhausted long buying.

Over-the-counter (OTC) desks are seeing steady institutional inflows. Unlike regular exchange orders, OTC buys happen off the public order books. This means they quietly tighten supply without obvious price spikes until liquidity is already scarce.

Social sentiment is also turning in Ethereum’s favor. Data shows ETH regaining dominance in trader discussions, overtaking other altcoins. Many analysts now see $5,000 ETH as a more likely outcome than a deep retracement, unless a major macro shock hits.

And that means shorting Ethereum might not be the best trading play currently.

Key Levels and Why Shorting Ethereum Is a Bad Bet Right Now

Ethereum has built strong support between $4,050 and $4,100. As long as the ETH price holds this base, the short trade setup is unfavorable. A lower-risk short entry would require a decisive break below $3,950 on high volume, which hasn’t happened yet.

Macro conditions are also lending support. Global liquidity remains healthy, institutional inflows are steady, and BTC dominance is easing, giving ETH room to rally further.

When you combine whale accumulation, low exchange supply, rising social sentiment, and a steady uptrend, shorting Ethereum now means betting against multiple bullish forces at once.

That’s not just risky; it’s playing directly into the hands of the market makers who profit from forcing shorts to cover at higher and higher prices.

The ETH price squeeze is being driven by whale buying, reduced sell-side liquidity, and short sellers trapped in losing positions.

Unless Ethereum decisively loses its key support levels or falls under $3,900, shorting Ethereum remains one of the most dangerous trades in the market right now. In this environment, the trend is clear: the higher ETH goes, the more it forces shorts to buy back, fueling the rally even further.