$170M Ether longs liquidated as crypto market tumbles: Is ETH doomed?
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- Ether (ETH) dropped 5% on Tuesday, erasing 12 days of prior gains and triggering $170 million in liquidations of bullish leveraged positions.
- ETH perpetual futures annualized funding rate flipped to roughly -3%, meaning short sellers are paying to hold positions and signaling a lack of bullish conviction.
- Ether declined 20% over 30 days, slightly worse than the broader crypto market's 17% drop, with the article attributing part of the move to fears over US-Iran peace negotiations and high costs of AI infrastructure build-out.
- Ethereum holds $38 billion in DeFi TVL for a 53% market share, and its ecosystem accounts for 43% of DEX volumes when including L2s, though DApp TVL shrank 23% in three months.
- BitMine (BMNR US) holds $9.3 billion in unrealized losses on its ETH reserves, while ETH's 2.7% staking yield trails US money market returns, a structural disadvantage the source flags for yield-seeking capital.
- US-listed spot Ether ETFs posted $910 million in net outflows over six consecutive weeks, cutting total net assets to $9.4 billion, the source notes this constant selling pressure undermined sentiment.
- The Ethereum Foundation laid off 20% of its workforce after a 40% budget cut, though the source notes the upcoming Glamsterdam protocol upgrade aims to reduce centralization via split block creation and parallel transaction processing.
Why it matters: With $910 million in ETF outflows over six weeks and a -3% funding rate, institutional conviction in ETH is visibly cooling, while the EF's 20% staff cut and BitMine's $9.3 billion in unrealized losses add organizational and counterparty risk. The 2.7% staking yield trailing US money market rates gives yield-seeking allocators a reason to rotate out, meaning ETH must rely on its 53% DeFi TVL dominance and the Glamsterdam upgrade narrative to stem further redemptions.
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