Ethereum Shorts Pile Up On Binance As Squeeze Risk Grows

Ethereum’s derivatives market on Binance is flashing a setup that could leave short sellers exposed if the recent move higher continues. According to analysis shared on X by CryptoQuant contributor Darkfost, positioning has become increasingly one-sided even as ETH has rebounded sharply from its February low, creating the conditions for further short squeezes. Ethereum Bears Crowd In On Binance The core of the argument is a mismatch between price action and trader conviction. Darkfost said that since February, around 350,000 ETH has been added to open interest on Binance, which now represents roughly 37% of total market share. At current prices, that amounts to more than $1 billion flowing into Binance’s ETH derivatives complex.

What stands out is not just the size of that increase, but the direction of positioning behind it. “What is paradoxical is that despite the recent price increase (+35% since the February low), the majority of investors appear to be positioning for a correction by shorting the market,” Darkfost wrote. “This can be observed through ETH funding rates on Binance, which have reached levels not seen since the previous bear market.” That matters because funding rates offer a read on which side of the perpetual futures market is leaning more aggressively. Darkfost said Binance funding has remained mostly negative since late January, suggesting traders have continued to pay to hold short exposure rather than chase the rebound. In other words, the move higher has not fully reset bearish conviction.

The post argues that this skepticism has now reached a level that is unusual even by recent standards. “Observing such negative levels, with funding rates dropping below -0.01%, is relatively rare and indicates a significant buildup of short positions while investors remain in disbelief,” Darkfost wrote. “When this level of consensus forms, it is not uncommon for the market to move against the majority, triggering liquidations of the most aggressive positions and leading to short squeeze events, like the one observed yesterday.” That squeeze dynamic has already started to show up in the liquidation data. Darkfost noted that more than $3 million in short positions were liquidated twice within a single hour on Binance, a sign that even modest upside extensions are capable of forcing leveraged bears out of the market. In crowded setups, those forced exits can become self-reinforcing, as liquidations add incremental buy pressure and push price into the next pocket of vulnerable positions.

The broader implication is not necessarily that Ethereum is entering a straight-line rally, but that the derivatives structure has tilted in a way that can amplify upside if sentiment remains slow to adjust. Darkfost framed the recent rally as the “early phase of the uptrend,” arguing that months of short accumulation could continue to provide fuel if traders remain positioned for reversal rather than continuation. There is, however, one important shift underway. Funding rates are now beginning to turn positive again, with Darkfost citing a reading around +0.01%, though the day’s data was not yet complete. If that change holds, the market structure would begin to look different: less driven by disbelief-fueled squeezes, and more by traders starting to align with the move. For now, the message from Binance’s ETH derivatives market is fairly clear. Shorts have piled in aggressively, but the more crowded that trade becomes, the more fragile it is if Ethereum keeps grinding higher. At press time, ETH traded at $2,318.

Meme Coin Unicorns That Are Now Basically Dust Again

During the last bull market, in what is popularly known as the Solana meme coin season, a number of new cryptocurrencies made their way to the forefront. These digital assets had gone from market caps in the tens of millions to cross the billion-dollar market cap, sometimes in only a matter of months. Due to their rapid growth rate, these meme coins have quickly garnered a wide holder base. However, as the bear market has rolled around, these billion-dollar meme coins have crashed by a large margin, completely eliminating the majority of their gains.

POPCAT is one of the most recognizable names to come out of the Solana meme coin season, but its growth trajectory is even more interesting. The total growth from less than $1 million to over $2 billion happened in less than one year, showing one of the most impressive meme coin rallies in history. Even more interesting is the fact that the meme coin did not stop there, eventually reaching $2 billion before reaching a top. However, since the initial decline, which began back in November 2024, the price has now crashed by more than 97%. It has gone from $2.05 per coin at the peak, with the meme coin’s market cap dropping below $50 million as it is currently trading at $0.05 at the time of writing. This categorizes it as one of the worst crashes that has plagued a previously top meme coin.

Unlike POPCAT, Cats in a Dogs World (MEW) had made its entrance to the meme coin market ‘fully formed.’ The meme coin had burst into the scene with its market cap already trading above $100 million, earning it allegations that it was a ‘cabal coin.’ Nevertheless, the meme coin had continued to move upward, eventually topping just above $1.2 billion. This was before the bear market hit, and the price began to fall again in November of 2024. Since then, the price has fallen by more than 95%, with its market cap now sitting at a mere $50 million.

Peanut The Squirrel (PNUT) is a meme coin named after an Eastern gray squirrel which went viral after its dead in 2024. Following its launch, the meme coin quickly gained prominence, gaining support from the Binance crypto exchange and quickly getting listed. As a result, it was able to cross $1 billion market cap in less than one month, becoming the fastest on this list to reach the milestone. Just like its growth trajectory was fastest, the PNUT meme coin has suffered the most in terms of losses. According to data from the Coingecko website, the coin is down more than 98% since November 2024 and is now sitting at a $40 million market cap.