The Ethereum market is experiencing a historic moment: the volume of forced short position liquidations has surged to record levels not seen since 2022. The spike occurred in early July amid a modest but significant price rebound of the leading altcoin.
Decline in Open Interest and a Wave of Liquidations
Network data shows a sharp cooling of the market. Ethereum's Open Interest has collapsed from a record $33.9 billion in October 2025 to $11.2 billion. This decline is a direct consequence of a severe correction that wiped out traders with excessive leverage.
The price of ETH dropped from approximately $3200 to $1500, triggering massive liquidation cascades, especially on Binance. At the end of June, the volume of forced long position liquidations reached a level comparable to October 10 of last year, when the market experienced one of the largest waves of liquidations in its history.
Trend Reversal: Bears Under Pressure
However, with a slight rebound in early July, the structure of liquidations changed dramatically. Short positions began to dominate. This was particularly evident on July 2, when the largest short liquidations since 2022 were recorded.
This dynamic is a clear indicator of "investor impatience." The market is moving extremely sluggishly, pushing some traders toward risky actions. They increase leverage, trying to profit from low volatility, but often fall into a trap due to poor risk management.
Sharp movements in the ETH price in both directions lead to waves of liquidations: first longs are wiped out, and then, on the rebound, shorts.
Expert Opinion
The current situation is a classic example of a "double blow" to an overheated market. I expect that in the coming weeks, we will see further declines in volatility and consolidation, making high-leverage trading even more dangerous. Traders should focus on capital management rather than chasing quick profits in a dead market.