Ethereum faces $87M short bet – Can ETH bulls defend $1,580?

ambcryptoPublished on 2026-07-09Last updated on 2026-07-09

Abstract

Ethereum (ETH) is facing significant bearish pressure amidst a return of risk-off sentiment in financial markets. This follows collapsed geopolitical developments, including a failed U.S.-Iran ceasefire. A notable $86.99 million ETH short position has been opened, with liquidation set at $2,172, indicating a calculated bet on further downside. Adding to market uncertainty, founder Vitalik Buterin transferred $1.6 million worth of ETH, sparking sell-off speculation. ETH is now retesting the critical $1,580 support level, a historically strong demand zone. Bulls must defend this level to maintain the bullish structure. On-chain data provides some counterbalance: entity Bitmine purchased 40,000 ETH (~$71.6 million), and staked ETH supply has reached a new all-time high of over 40 million. These factors suggest underlying accumulation. The key question is whether the current setup will lead to a deeper breakdown or trigger a short squeeze if bulls successfully defend support and push the price higher, putting the large short position at risk.

Ethereum [ETH] bulls might already be facing their biggest test of Q3.

On the macro front, risk-off sentiment returned quickly after the U.S.-Iran ceasefire collapsed, triggering a sharp market-wide sell-off and highlighting how sensitive risk assets remain to geopolitical developments. A recent Ethereum trader position highlighted this volatility.

According to Arkham Intelligence, an Ethereum trader opened an $86.99 million ETH short position, with liquidation set at $2,172. Notably, the position emerged after headlines surrounding the ceasefire collapse and the U.S. cutting off a trade deal with Spain, adding further pressure to market sentiment.

Source: X

This suggests the position was likely a calculated bet on further downside rather than a random short.

Adding to the market uncertainty, Arkham Intelligence also flagged a wallet movement linked to Ethereum founder Vitalik Buterin, who transferred $1.6 million worth of ETH to a new wallet. The move sparked speculation that another sell-off could be coming, especially after recent ETH transfers from Vitalik.

With the market already shifting back into risk-off mode, the combination of possible sell-side pressure and a large $80 million ETH short position has created a more cautious setup for bulls. The key question now is whether this short position is an early signal of a deeper ETH breakdown or if bulls can defend key support levels and trigger a short squeeze.

Ethereum faces a critical support test as bearish pressure rises

Ethereum sits at the crossroads of bearish market conditions and a strong technical setup.

While risk-off sentiment, rising short interest, and selling pressure support the bearish case, Ethereum is retesting the key $1,580 support level. This zone has acted as a major demand area over the past three years, triggering strong recoveries, including a +149% rally in October 2023 and a +203% in April 2025.

For bulls, defending $1,580 is therefore critical to keeping the bullish structure intact. Adding to the support narrative, Tom Lee-linked Bitmine continues to accumulate ETH. According to Lookonchain, Bitmine purchased another 40,000 ETH worth around $71.6 million. At the same time, staked ETH supply has reached a new all-time high of over 40 million ETH, representing around 33% of total supply.

Source: Validator Queue

With this accumulation, ETH’s move above $1,750 looks more than just a short-term bounce.

Instead, bulls appear to be stepping in despite the broader risk-off environment, rising short interest, and market concerns around Vitalik’s recent ETH transfer.

If this momentum continues, the $80 million short position could come under pressure, with liquidation risk building around $2.7k. In this setup, Ethereum’s technical structure could be setting up a bear trap.

Final Summary

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