Ether&nbsp;traders have stacked up their short positions over the last 24 hours, just as Grayscale Investments pulled its application for an Ethereum futures exchange-traded fund (ETF).
Ether (<a href="https://cointelegraph.com/ethereum-price">ETH</a>) is hovering close to a key support level at $3,010, having dropped by 1.85% over the past 24 hours, <a href="https://coinmarketcap.com/currencies/ethereum/" target="_blank" rel="noopener nofollow">according</a> to CoinMarketCap data. 
However, liquidation maps show traders have more conviction that the price is going down in the near term — with $345 million in short positions set to liquidate if the price goes up by 3%. 
On the other hand, a 3% drop to $2,920 would only wipe $237 million in long positions.
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-05/54e82d01-ec45-4c07-8cf0-9d5f65ee6f1a.png" alt="" title="">
 <figcaption style="text-align: center;">
 Liquidation data traders are anticipating a further decline in Ether’s price. Source: CoinGlass
 </figcaption>
</figure>
It comes after Grayscale’s May 7 decision to <a href="https://cointelegraph.com/news/grayscale-withdraws-ethereum-futures-etf-application">withdraw its Ether futures ETF application</a>, just three weeks before the United States Securities and Exchange Commission (SEC) was set to decide on it.
It also comes amid speculation on whether Ether could be classified as a security and the fate of spot Ether ETF applications later in May. 
Despite optimism earlier in the year, analysts are becoming increasingly doubtful about the chances of the SEC approving a spot Ether ETF as the next May 23 deadline approaches.
The sentiment among the crypto community is similar. According to the New York-based crypto predictions platform Polymarket, 92% of <a href="https://polymarket.com/event/ethereum-etf-approved-by-may-31?tid=1715145171516" target="_blank" rel="noopener nofollow">participants</a> believe the spot Ether ETFs will be denied.
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-05/9e6b4552-05ca-45e1-ac71-ce502b73c7d0.png" alt="" title="">
 <figcaption style="text-align: center;">
 Polymarket participants are not optimistic about the chances of spot Ethereum ETF approval by the end of May. Source: Polymarkets
 </figcaption>
</figure>
There are also broader concerns over Ethereum’s overall usage and lack of speculative interest from short-term holders (STH).
“Usage of Ethereum is currently so low, that their burn mechanism is not keeping up with issuance to validators,” crypto on-chain analyst James Check, aka “Checkmatey,” said in a May 7 <a href="https://x.com/_Checkmatey_/status/1788004252612546614" target="_blank" rel="noopener nofollow">post</a> on X.
Related: <a href="https://cointelegraph.com/news/michael-saylor-sec-ether-security">SEC will classify Ether as security, deny spot Ether ETFs — Michael Saylor</a>
On May 8, Glassnode said <a href="https://cointelegraph.com/news/ethereum-price-lags-due-to-weaker-capital-rotation-but-crypto-macro-uptrend-remains">Ether’s under-performance this cycle relative</a> to Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) is due to a “measurable lag in speculative interest” from the STH cohort.
However, just days before the news, some traders were optimistic that Ether’s price could experience a breakout by the end of 2024.
“Similar fractal as of Q4 of 2020, Breakout could happen in Q3 of 2024 as per historical pattern,” pseudonymous crypto trader Ash Crypto <a href="https://x.com/Ashcryptoreal/status/1787399937858187716" target="_blank" rel="noopener nofollow">told</a> his 1.1 million followers on May 6.
“Ethereum is presently moving within a falling wedge pattern, with its price testing a notable support zone. Anticipate possible sideways movement around this support area,” pseudonymous crypto commentator TheCryptoPalace&nbsp;<a href="https://x.com/CRYPTOPALACE_/status/1785670827419037932" target="_blank" rel="noopener nofollow">told</a> their 20,400 X followers on May 1.
Magazine: <a href="https://cointelegraph.com/magazine/crypto-altcoins-bitcoin-prediction-charles-edwards-hall-of-flame/">Buy altcoins now, but sell before ‘mid-2025’: Charles Edwards, X Hall of Flame</a>
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Traders rush to short Ether as Grayscale pulls its futures ETF plan

Cointelegraph

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