The price of Ethereum (ETH) has been hovering near a crucial support level at $3,010, experiencing a 2.57% drop over the past 24 hours, according to CoinMarketCap data. During this time, traders have shown a growing belief that the price will continue to decline, as they have accumulated significant short positions.

This development comes after Grayscale Investments decided to withdraw its application for an Ethereum futures exchange-traded fund (ETF) on May 7, just ahead of the scheduled decision by the United States Securities and Exchange Commission (SEC). The fate of spot Ether ETF applications, also set to be determined in May, has further fueled speculation regarding the classification of Ether as a security.

Liquidation data indicates that if the price of Ether rises by 3%, approximately $345 million worth of short positions could be liquidated. In contrast, a 3% drop to $2,920 would only result in the liquidation of about $237 million in long positions.

Analysts and the crypto community have grown increasingly skeptical about the approval of a spot Ether ETF by the SEC. However, concerns about Ethereum extend beyond ETF approvals. The low usage of Ethereum has resulted in the challenge of its burn mechanism keeping up with issuance to validators. Furthermore, Ethereum has underperformed in comparison to Bitcoin, attributing it to a lag in speculative interest from short-term holders (STH).