.png){kind=logo}
Ethereum’s rebound has placed short sellers under pressure, as Binance funding rates remain negative while liquidation volumes rise. Analyst Darkfrost shared CryptoQuant charts on X showing that traders continue to lean heavily bearish, even after ETH recovered more than 30% from its February 6 low. The data also shows funding conditions now mirror a prolonged bearish setup last seen during the FTX collapse in November 2022.
The CryptoQuant funding chart tracks Ethereum’s price against Binance funding rates from late 2022 to May 2026. It shows several periods of positive funding during strong rallies, but recent data moved below the zero line.
According to Darkfrost, Binance’s monthly average funding rate now stands at -0.0018. That figure reflects continued demand for short positions, even as ETH has moved higher from its recent low.
Funding rates help show futures traders' positions in the market. Negative funding means short sellers pay long traders, which often points to stronger bearish positioning across perpetual futures markets.
This setup has lasted through Ethereum’s recovery phase. As a result, the chart shows a gap between ETH’s price action and trader sentiment on Binance derivatives. Darkfrost noted that such prolonged negative funding levels last appeared in November 2022. That period followed the FTX collapse and marked the final stage of the previous bear market.
Even so, the analyst stated that today’s market environment differs from that period. The comparison focuses only on the funding pattern and its duration, not the wider market backdrop.
Ethereum led the altcoin decline during the recent downturn, according to the analyst’s post. ETH corrected around 65% from its last peak before conditions started to improve. TOTAL2, which tracks the total crypto market capitalization excluding Bitcoin and stablecoins, also declined by more than 51%. That move showed broad pressure across the altcoin market.
After that drawdown, Ethereum moved more than 30% above its February 6 low. The recovery placed ETH back near the $2,200 area on the CryptoQuant chart.
Read More: Ethereum Buy Volume Tops $1B as ETH Falls Below $2,300
Even with that rebound, Darkfrost said many investors remain unconvinced. They continue to hold aggressive short positions instead of adjusting to the price recovery.
The funding chart suggests that bearish positioning has stayed firm during the rebound. At the same time, the price line shows ETH recovering from its latest low and moving away from the weak zone. That combination has created a crowded short setup. When many traders hold the same bearish view, sharp upside moves can force position closures.
The second CryptoQuant chart shows Binance ETH liquidation volume across several price zones. It tracks long liquidation volume and short liquidation volume from 2022 to 2026. Recent data shows rising short liquidation volumes as ETH moves higher. The largest recent dots appear around the $2,000 to $2,400 price region, where forced short exits increased.
Short liquidations happen when bearish positions lose margin during price gains. Exchanges then close those positions, which can add extra buying pressure to the market.
Darkfrost said some short sellers are already paying the price. The liquidation map shows larger short liquidation prints near the latest rebound area. This trend follows the same pressure shown in funding rates. Traders continue to position for downside, while Ethereum’s price recovery forces some positions out of the market.
As a result, ETH’s futures market shows a clear tension between price movement and trader positioning. Funding remains negative, yet short liquidation activity continues to build.
The charts point to an active squeeze setup on Binance. Negative funding shows bearish conviction, while liquidation volume shows that part of that conviction has started to unwind.
Ethereum’s rebound has tightened pressure on short sellers as Binance funding rates remain negative and short liquidation volumes rise. CryptoQuant data shows bearish positioning is still strong, even as ETH trades above its February low. The next key signal is whether forced short exits continue fueling recovery.
