Ethereum Faces Pressure After $170 Million in Long Liquidations

Ether came under fresh selling pressure this week after a sharp market decline triggered roughly $170 million in liquidations of bullish leveraged positions. The drop wiped out gains accumulated over the previous 12 days and raised concerns about the short-term outlook for the second largest cryptocurrency.

Bearish Sentiment Grows in Ethereum Market

Demand for bearish positions increased as Ethereum futures funding rates turned negative, a sign that traders are becoming more cautious. ETH has fallen around 20% over the past month, slightly underperforming the broader cryptocurrency market, which declined about 17% during the same period.

Investor sentiment has also been affected by uncertainty surrounding global markets, including concerns over US-Iran peace negotiations and broader risk-off behavior linked to heavy spending on artificial intelligence infrastructure.

Ethereum Foundation Cuts Add to Concerns

Market pressure intensified after the Ethereum Foundation announced organizational changes that included a 40% budget reduction and a 20% workforce cut. At the same time, US spot Ethereum exchange-traded funds have recorded six straight weeks of net outflows, with approximately $910 million leaving the products since mid-May.

Another concern for investors is the lower staking yield of around 2.7%, which remains below returns available in some traditional money market products.

Ethereum Retains Strong DeFi Leadership

Despite recent weakness, Ethereum continues to dominate decentralized finance. The network currently holds about $38 billion in total value locked, representing roughly 53% of the DeFi market. When layer-2 networks are included, the Ethereum ecosystem accounts for around 43% of decentralized exchange trading volume.

Developers are also preparing the upcoming Glamsterdam upgrade, which is expected to improve network efficiency, strengthen security and reduce centralization risks. While short term sentiment remains fragile, Ethereum’s leading position in decentralized applications and institutional adoption continues to support its longer-term outlook.