$170M in ETH Longs Liquidated — Market Confidence Wavers
By John Nada·Jun 23, 2026·3 min read
Ethereum faces $170M in futures liquidations amid a 5% price drop, highlighting market uncertainty. Institutional outflows and budget cuts add to the pressure.
$170 million in bullish Ether (ETH) futures were liquidated as the cryptocurrency faced a 5% correction on Tuesday, erasing gains from the last 12 days. According to Cointelegraph, this sharp move has put traders on high alert, reflecting a fragile investment climate amid broader market volatility.
The demand for bearish positions saw the perpetual futures funding rate dive into negative territory. At its current 3% level, this indicates a lack of confidence from investors, though it aligns with Ether's recent performance struggles. The cryptocurrency has declined by 20% over 30 days, slightly worse than the 17% drop in overall market capitalization. High costs associated with artificial intelligence development and geopolitical uncertainties, like U.S.-Iran negotiations, have added to investor caution.
Ethereum's dominance in decentralized finance (DeFi) remains a bright spot, holding a 53% market share with $38 billion in total value locked. Despite this, the industry faces headwinds as decentralized applications (DApps) struggle, causing multiple shutdowns and a 23% drop in TVL over three months. Lower demand for blockchain data processing weakens Ethereum's investment case, despite its leadership in institutional investor activity.
The Ethereum Foundation announced a 20% staff layoff following a 40% budget cut. Although this might concern some investors, Ethereum's ecosystem doesn't rely solely on the Foundation's operations. The upcoming Glamsterdam protocol upgrade, aimed at reducing centralization and enhancing security, could bolster network confidence.
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Institutional sentiment is mixed, with U.S.-listed Ether spot ETFs experiencing six consecutive weeks of outflows, totaling $910 million since mid-May. This persistent selling pressure has weighed on market sentiment. Meanwhile, BitMine remains committed to increasing its ETH position, despite holding $9.3 billion in unrealized losses. Cointelegraph noted that BitMine's stance might deter other institutional players from diving into Ethereum, reflecting the cautious mood pervading the market.
The negative ETH futures funding rates and six weeks of spot ETF outflows highlight a fragile investment climate. Despite controlled ETH issuance at 0.8% equivalent annual inflation, the staking reward rate was 2.7%, which is lower than the US money market yield. This disparity further adds to investors' hesitance.
Additionally, Ethereum leads in DeFi even as activity slumps. The overall weakness in the decentralized applications (DApps) industry has led multiple projects to shut down. The aggregate total value locked (TVL) shrank by 23% in three months, highlighting the lower demand for blockchain data processing.
Ethereum’s $38 billion decentralized finance (DeFi) TVL represents a 53% market share, signaling institutional investors’ preference. Additionally, when including its layer-2 scaling solutions, the Ethereum ecosystem accounts for 43% of decentralized exchange (DEX) volumes. However, Ethereum faces criticism for relatively low 30-day fees of $11 million.
Even though there is no imminent risk of BitMine being forced to reduce its ETH holdings, the situation likely deters institutional investors’ appetite. More concerningly, US-listed Ether spot exchange-traded funds (ETFs) posted net outflows for six consecutive weeks. Regardless of the rationale behind the move, the constant selling pressure undermined traders’ sentiment.