New data from Ethena shows that the speculative demand driving up prices in the cryptocurrency market is clearly weakening. The amount of capital deployed by this platform has dropped to its lowest level in years, only about 71% of the 2025 low. This reflects that the “net long” cash flow in the crypto market is very weak.
Meanwhile, the number of long and short positions is now nearly balanced—an uncommon state in the history of the crypto derivatives market and unlikely to last long. In the perpetual futures market, open interest remains stable, but the funding rate is consistently negative, indicating increasing demand for hedging and short selling.
Notably, Ethena’s basis trade transactions have decreased by over 60% since February 8, from over $2 billion down to less than $800 million. This decline is mainly due to investors closing basis positions that previously generated profits but are difficult to sustain, along with pressure from hedging activities and trend-following short positions.
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