Why is ETH the biggest smart money short right now?

Among the coins we track on Hyperliquid, ETH has by far the most one-sided positioning. 745 top-performing wallets are short vs only 248 long. On every other coin that gap is 40-50 wallets. ETH is the primary bet of the current bear leg, entered around $2,242 with 67% of tracked wallets on the same side.

What is the RISK-OFF regime on HyprSwarm?

RISK-OFF means the majority of the top-performing wallets we track are defensively positioned, meaning more wallets are betting on prices going down than up across most major coins. The current RISK-OFF period started February 19th and is now in its 22nd day.

Which positions are earning funding right now?

The ETH short ($541M) is collecting funding, meaning shorts get paid a small fee every few hours just for holding. BTC longs ($768M), HYPE longs ($188M), SOL longs ($108M), and XRP longs ($34M) are also collecting funding on the long side. Smart money is being paid to hold on both sides of the book at the same time.

What is the crowded short risk on ETH?

745 wallets are short ETH and all sitting on profit. When that many wallets are in the same trade and winning, the exit is the hard part. If ETH bounces, all of them need to close at the same time. $541M trying to exit through the same door tends to make the move worse. HYPE, the one losing short in the book at -11.41%, is the early warning of what forced covering looks like.

ETH Short: 745 Wallets, One Exit Door

RISK-OFF · Day 22 | ETH short holding at +8.67%, HYPE bleed deepening, carry keeping everyone in.

When 745 wallets are all in the same trade and all winning, the position is not the problem. The exit is.

Two days ago we flagged the HYPE short bleeding at -7% with 836 wallets underwater and the question of whether covering pressure would build. For anyone new to reading these tables, the guide on how to read the positioning table explains the column structure. It has not resolved. The loss has deepened to -11.41% with 838 wallets now in the position. That story is still running. More on it below.

The bigger picture has also shifted. This is no longer just a HYPE story. ETH has become the most one-sided position in the entire book.

ETH is the outlier

Most coins have a gap of 40-50 wallets between the short and long side. ETH is nearly 500. The table makes it obvious:

Coin	Short Wallets	Long Wallets	Unrealized P&L	Position Size
ETH	745	248	+8.67%	$541M
XRP	more	fewer	—	—
BTC	more	fewer	—	—
SOL	more	fewer	—	—
HYPE	838	—	-11.41%	—

Those 745 wallets entered the ETH short around $2,243. At today's $2,048 they are up 8.67% and sitting on $541M in total size. The trade is working.

Being right is also the risk

67% of tracked wallets are on the same side of ETH. That consensus is what made the trade work. It is also what makes the exit dangerous. If ETH catches a bid, $541M needs to leave through the same door at the same time. There is no quiet exit for a trade this crowded.

The market is paying them to stay

Here is why this has not unwound after 22 days. Every major position is collecting funding:

Coin	Direction	Position Size	Funding
BTC	Long	$768M	Paid to hold
ETH	Short	$541M	Paid to hold
HYPE	Long	$188M	Paid to hold
SOL	Long	$108M	Paid to hold
XRP	Long	$34M	Paid to hold

Funding means the market pays a small fee every few hours to whoever is on the right side of the trade. Right now smart money is collecting on both the ETH short and every long position simultaneously. When you are profitable and getting paid to hold, there is no rational reason to close.

The one crack

HYPE. 838 wallets are short from $33.16, now at $36.94, down 11.41%. It is the only losing position in an otherwise profitable book. If covering pressure builds there, watch whether it spreads into ETH.

What the best wallets are doing that the crowd is not

The top-50 rated wallets by performance disagree with the broader pool on several coins. These rankings are built using how we rate wallets by skill, so the divergence reflects verified track records, not just size:

Coin	Top-50 Short %	All Wallets Short %	Reading
PAXG (gold)	11%	38.6%	Best wallets heavily long gold, crowd follows
BABY	100%	37%	Best wallets fully short, crowd leans long
XMR	100%	43%	Best wallets fully short, crowd leans long
XAI	100%	50%	Best wallets fully short, crowd split

On BABY and XMR the best performers and the crowd are pointing in opposite directions. On USUAL and kNEIRO, most wallets are short but 85-92% of the dollar value is long, meaning a small number of large positions are dominating the long side while everyone else bets down. One of those groups is wrong.

The watch

These regimes do not end gradually. They end when something forces the crowded side to move.

The HYPE short is the canary. We called it two days ago and the loss has only deepened since. If covering pressure there turns into actual unwinds at scale, watch whether it ripples into the ETH position. And if ETH funding flips from negative to positive, a $541M crowded short suddenly becomes expensive to hold rather than profitable.

Watch: ETH funding rate and HYPE price action. If HYPE breaks above $38 or ETH funding turns positive, the carry layer that has been keeping this regime intact starts to crack.

For live positioning data see the HyprSwarm dashboard.

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This analysis is based on HyprSwarm's tracking of 4,000+ skill-rated Hyperliquid wallets. It reflects positioning data, not financial advice. Always do your own research.