One look at the technicals is enough to show how bearish the market has turned. Nothing reflects this better than Ethereum.
According to CoinGlass data, ETH closed Q2 down 25.28%, extending Q1’s 29.26% drop. That puts the altcoin down nearly 50% in the first half of 2026, leaving holders who bought the top deep underwater.
The price structure tells the same story. As the chart below shows, ETH has lost two major support levels. It first broke below $3,200 in mid-January, then lost the $2,000 level in early June.
Since then, the next base has formed around $1,500, where ETH has been chopping sideways for more than four straight weeks.
Source: TradingView (ETH/USDT)
Now, looking at Santiment’s latest report, it seems another breakdown could be on the cards.
According to the report, large Ethereum transfers to CEXs usually point to higher selloff risk, as whales tend to move coins onto exchanges before selling, hedging, or rebalancing. However, this time there’s a catch.
Those ETH inflows have been accompanied by strong stablecoin inflows, suggesting whales are also moving dry powder onto exchanges. That points to large players keeping capital ready, potentially to buy the dip rather than simply offload their ETH.
And the data already hints at where that capital could be moving. The timing looks deliberate, with Ethereum [ETH] trading right on top of a key support zone. A clean break below this level could trigger another round of panic selling as more HODLers fall deeper underwater. But so far, the cycle is telling a different story.
Ethereum’s chop may be a trap for short sellers
Every time the market consolidates in uncertainty, it tends to set a trap for traders.
Looking at Ethereum’s current flows, its chop around $1.5k could be building pressure for a short squeeze, with many traders still positioned for downside in a broader risk-off environment. But ETH is starting to diverge from the rest of the market based on key on-chain signals.
According to CryptoQuant, Ethereum is going through a sentiment reset, with negative Coinbase Premium and funding rates showing bearish positioning across both U.S. Spot and derivatives markets.
Even so, price is holding steady as exchange liquidity declines and ETH staking inflows continue to rise. This creates a “wall of worry” setup, where traders stay bearish while long-term holders keep locking up supply.
Source: CryptoQuant
In essence, Ethereum is in a high-conviction standoff.
This divergence is creating a potential trap for short sellers, as heavy bearish positioning in derivatives is clashing with strong holder conviction. In fact, Ethereum recorded the highest user retention rate among major blockchains at 26.2%, according to CoinGecko’s Q1 2025 to Q1 2026 cohort study.
Hence, with strong retention, rising staking activity, and ongoing deleveraging, Ethereum’s current chop could be risky for those still positioned short.
Final Summary
- Ethereum bears are positioned heavily, but staking and retention remain strong.
- Price is chopping near $1.5k, increasing the risk of a squeeze.
