Retail Traders Hold 94% Long Positions on Ether, Signaling Possible Price Reversal
Ether (ETH) continues to trade below the $4,000 mark following last Friday’s flash crash. The second-largest cryptocurrency is currently consolidating between its 50-day, 100-day, and 200-day exponential moving averages – a technical zone that reflects an ongoing battle between short-term and long-term market trends. This price action indicates uncertainty in the current market environment.
Strong Retail Optimism Amid High Long Positions
Data from Hyblock Capital reveals that retail traders are showing strong optimism about Ether’s future price movement. The percentage of true retail accounts holding long positions has reached 94%, placing Ether at the 90th percentile among major crypto assets. For comparison, Bitcoin’s retail long percentage also sits at 94%, while Solana’s is at 86%.
However, such high levels of retail long positioning often act as a contrarian indicator. Hyblock Capital notes a significant inverse correlation (-0.86) between retail long positioning and Ether’s price. This means that when retail longs hit extreme highs, the probability of a price reversal increases. Historically, these outlier readings indicate overcrowded long positions, which may lead traders to start taking profits or face liquidations.
Funding Rates Indicate Healthy Market Structure
Analyzing the derivatives market on Binance, crypto analyst Pelin Ay highlights that funding rates remain positive but moderate. Currently, funding rates for Ether range between 0.01% and 0.03%, signaling a healthy mid-phase uptrend. This contrasts sharply with the overheated conditions seen in 2021 when funding rates peaked between 0.1% and 0.2%.
Ay explains that this moderate leverage, combined with improving spot demand, could support a potential rally toward the $4,500 to $5,000 range. However, she cautions that any sudden increase in funding rates above 0.05% might indicate overcrowded longs, potentially triggering short-term pullbacks in Ether’s price.
Bearish MACD Crossover Forms on Weekly Chart
From a technical analysis perspective, a bearish MACD crossover is forming on Ethereum’s weekly chart. This pattern has historically preceded significant corrections, with previous occurrences leading to declines of 43% and 61%. Currently, the signal line is tilting above the MACD line, suggesting that bearish momentum may intensify if this crossover confirms.
Despite this, Ether’s broader structure remains resilient. Since January 2025, higher lows have been maintained, and support near $3,700 has held firm during recent pullbacks. Additionally, the 50-week moving average continues to act as a strong foundational support. While short-term bearish pressure may persist, the long-term outlook depends on sustained institutional demand.
BitMine Immersion Technologies Boosts Ether Holdings
In the midst of these developments, BitMine Immersion Technologies has made significant purchases during the recent price dip. Chaired by renowned crypto analyst Tom Lee, the company acquired 104,336 ETH worth approximately $417 million on Thursday. This followed an earlier purchase of over 202,000 ETH on Sunday.
With these acquisitions, BitMine’s total Ether reserves have grown to a current market value of $9.3 billion. The company has consistently expanded its holdings throughout 2025, demonstrating strong conviction in Ethereum’s long-term potential despite short-term technical concerns. Increased corporate appetite for ETH typically reduces exchange reserves, which can help support prices during sell-offs and positively influence market sentiment.
Tom Lee Maintains Bullish Year-End Target
Tom Lee continues to hold a bullish outlook for Ether, maintaining his year-end price target of $10,000 per ETH. His optimism is underpinned by growing institutional interest and rising spot market demand, factors that could drive significant appreciation in Ethereum’s value moving forward.
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In summary, while Ether faces short-term technical challenges, including a bearish MACD crossover and high retail long positioning that could signal an impending price correction, moderate funding rates and strong institutional accumulation reflect a healthy underlying market. Traders and investors should watch these key indicators closely as the market continues to evolve.
https://coincentral.com/ether-eth-price-bitmine-buys-the-dip-as-retail-long-positions-hit-94-warning-sign/
