Ethena arbitrage positions shrink by over 60%, and the crypto derivatives market is now rarely balanced between bulls and bears.

ZkProver · 2026-03-12T05:16:21+00:00

Since Bitcoin's sharp decline on February 8, the arbitrage positions of the decentralized stablecoin protocol Ethena have dropped by over 60%. Analysts point out that the market has shifted from arbitrage traders to hedgers, creating a crowded short trade. The long and short positions in the derivatives market are approaching equilibrium, indicating that the market may be facing a directional shift.

ZkProver

2026-03-12 05:16:21

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ChainCatcher reports that since Bitcoin’s sharp drop to $60,000 on February 8, the arbitrage positions of the decentralized stablecoin protocol Ethena have plummeted from over $2 billion to below $800 million, a decline of over 60%.

Ethena’s business model relies on taking the opposite side of leveraged long positions in the perpetual contract market. The significant reduction in positions indicates that short sellers and hedgers are filling roles traditionally dominated by arbitrage traders. Analyst SoskaKyle pointed out that this shift is mainly due to crypto venture capital firms and small to medium projects entering large-scale hedging to protect treasury assets and lock in profits, creating crowded trades that short various related tokens.

Currently, the derivatives market’s long and short positions are approaching equilibrium, a state that is extremely rare in history and difficult to sustain. The market may be at a critical point of a directional shift.

ENA2,25%

BTC0,55%

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