The split signal flagged last week in ETH has shifted — shorts have continued building at pace, and the extreme call skew in options has meaningfully faded.
The short interest story has moved from notable to pronounced. Shares short have risen another 27% in the seven days to July 21, reaching 3.2% of the free float — up from 2.5% a week ago. Zoom out further and the acceleration is stark: short interest has grown nearly 277% over the past month, from fewer than 500,000 shares to more than 2.3 million. The direction of travel is consistent and unbroken. Cost to borrow has also nudged higher, up roughly 40% on the week to 0.65%, though the absolute level remains low. That combination — rising short positions, rising borrow cost, but still-cheap financing — suggests the build is demand-driven rather than forced.
The options picture has rebalanced since the July 15 note flagged an extreme bull skew. The put/call ratio has drifted back up to 0.30, about 1.5 standard deviations above its 20-day mean of 0.28. One week ago it sat near three standard deviations below that average at 0.23. The reversal is notable: options traders have rotated from near-maximum bullishness to a modestly defensive tilt in a matter of days, even as the ETF itself added another 2.5% on the week to $18.33. The 52-week PCR range runs from 0.16 to 0.39, placing the current reading in the upper half — a meaningful shift from last week's lower-half extreme.
Availability in the lending market remains loose overall. With roughly 16.7 million shares still available to borrow against 2.3 million shorted, the ratio is around 780% — far from any squeeze pressure. But availability has tightened sharply from above 5,000% just ten days ago as the short book has grown. The ORTEX short score has climbed from 28.5 on July 10 to 38.8 now, reflecting the combination of rising short interest and tightening borrow conditions, though it remains below the midpoint of a 0-100 scale.
The ETF's underlying driver — Ethereum's continued rally — is the thread worth watching. The fund is up 13% over the past month, and that strength appears to be drawing in both call buyers and, increasingly, short sellers betting on a reversal. Whether the nascent defensive shift in options consolidates or the PCR retreats back toward the bullish extreme will say something about how much conviction options traders have in the recent run.
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