Ethereum is teetering on the edge of a potential short-squeeze showdown as leverage levels soar, with many traders betting on a price decline.

The rising Estimated Leverage Ratio indicates a surge in high-stakes short positions, suggesting that many are expecting a drop in $ETH prices. However, if Ethereum can push past the critical $2.7K resistance level, it could trigger a wave of short-covering, sending prices sharply upward.

Despite this possibility, market sentiment remains largely bearish. The Ethereum Foundation recently sold 100 $ETH for 252,491 $DAI just 10 minutes ago, continuing a trend of gradual sales.

In 2024 alone, the Ethereum Foundation has offloaded 4,066 $ETH for approximately $11.22 million, at an average price of $2,760. This includes sales of 1,250 $ETH ($3.07 million) in September and 300 $ETH ($759,000) in October, with small weekly batches during these two months.

Ethereum Average Transaction Fees Drops To Just $1.63 

Ethereum’s average transaction fees have dropped to just $1.63, a level low enough to historically encourage traders to increase their transfer activity. These reduced fees, compared to previous years, could influence trader behavior, increasing transaction frequency as the blockchain nears its 10-year anniversary.

Additionally, on October 22, Ethereum’s spot ETF saw a net inflow of $11.94 million, further indicating growing interest in the asset despite the prevailing bearish market mood.

As Ethereum’s network fees remain low and leveraged positions build up, all eyes are on the $2.7K resistance level. If broken, a short squeeze could rapidly change the current bearish tone and ignite a strong upward price movement.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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