$345 million in short positions would be eliminated by a 3% increase in Ether's price as Grayscale withdraws their Ether futures ETF application.

In the past day, traders of ether have increased the size of their short bets, coinciding with Grayscale Investments withdrawing its application to launch an exchange-traded fund (ETF) for Ethereum futures

Ethereum $ 2,996 is currently trading around a crucial support level at $3,010, down 1.85% in the last day, as per CoinMarketCap data.

Liquidation maps, on the other hand, indicate that traders are more certain that the price will drop in the near future. If the price rises by 3%, $345 million in short positions are scheduled to liquidate.

However, a 3% decline to $2,920 would only result in a $237 million loss. long positions.

It comes after Grayscale’s May 7 decision to withdraw its Ether futures ETF application, just three weeks before the United States Securities and Exchange Commission (SEC) was set to decide on it.

It also comes amid speculation on whether Ether could be classified as a security and the fate of spot Ether ETF applications later in May.

Despite optimism earlier in the year, analysts are becoming increasingly doubtful about the chances of the SEC approving a spot Ether ETF as the next May 23 deadline approaches.

The sentiment among the crypto community is similar. According to the New York-based crypto predictions platform Polymarket, 92% of participants believe the spot Ether ETFs will be denied

There are also broader concerns over Ethereum’s overall usage and lack of speculative interest from short-term holders (STH).

“Usage of Ethereum is currently so low, that their burn mechanism is not keeping up with issuance to validators,” crypto on-chain analyst James Check, aka “Checkmatey,” said in a May 7 post on X.

On May 8, Glassnode said Ether’s under-performance this cycle relative to Bitcoin

BTC $62,320 is due to a “measurable lag in speculative interest” from the STH cohort.

However, just days before the news, some traders were optimistic that Ether’s price could experience a breakout by the end of 2024.

“Similar fractal as of Q4 of 2020, Breakout could happen in Q3 of 2024 as per historical pattern,” pseudonymous crypto trader Ash Crypto told his 1.1 million followers on May 6.

“Ethereum is presently moving within a falling wedge pattern, with its price testing a notable support zone.

Anticipate possible sideways movement around this support area,” pseudonymous crypto commentator TheCryptoPalace told their 20,400 X followers on May 1.