Traders are shorting Ethereum, but a surprise rally can come instead

Key Takeaways

Will ETH see a sharp move soon?

Low buy activity and heavy short positioning are indicative of either a breakout or sudden correction.

Is there buying power ready to push ETH higher?

Over $1.6 billion in stablecoins flowed into ETH in 24 hours, showing strong demand.

The spotlight’s on Ethereum [ETH]!

On Binance, buy activity is unusually low while short positions are building, this can lead to a sharp drop or a sudden spike.

At the same time, $1.6 billion in stablecoins flowed into ETH in just 24 hours, showing plenty of buying power ready to move.

Will this push ETH higher, or spark a quick correction?

ETH traders turn bearish on Binance

Ethereum traders on Binance are showing unusually strong bearish sentiment, with the taker buy/sell ratio dropping below 0.87 on the 19th of September.

Source: Cryptoquant

This is a level reached only twice earlier this year.

The data shows heavy positioning on the sell side as ETH hovers near an ATH around $5,000.

Similar lows in January and February coincided with declines below $1,500. The 7-day average was at 0.93 at press time, marking the year’s lowest point.

This could mean a potential risk of a correction, but extreme bearish consensus can also cause short squeezes if buying pressure returns.

A pullback and a rally

Analyst TedPillows noted on X that ETH has been consolidating just below its 2021 ATH.

Source: X

He added that the pattens show at least a 25%+ correction after reaching previous ATHs. A similar move this time could bring prices down to around $3,700-$3,800 before resuming an upward trend.

Source: Token Terminal

Meanwhile, the stablecoin supply on Ethereum has surged to a new ATH of roughly $173 billion, up $50 billion since the start of the year.

This massive inflow of stablecoins indicates significant buying power in wait, potentially fueling a strong rally that could drive ETH toward $10,000 by early 2026.

ETH faces key support and resistance levels

Following all this, Ethereum’s price action is entering a critical phase.

The chart showed ETH consolidating around $4,470-$4,500, with short-term support near $4,460 and immediate resistance around $4,495.

RSI showed neutral momentum, while the MACD showed a slightly bearish bias but no strong trend yet.

Source: TradingView

In the short term, a break above $4,495 could trigger a rebound toward $4,550, while falling below $4,460 may open the path to $4,400.