A recent report from 10x Research highlights shorting Ethereum (ETH) as a potential hedge against Bitcoin (BTC) exposure, citing structural weaknesses in ETH's institutional narrative. According to the analysis, Ethereum-focused digital asset treasury (DAT) companies, such as BitMine, are running out of dry powder, undermining the previous accumulation and distribution model that drove prices higher.
BitMine holds approximately 3.3 million ETH, making it the largest among 15 ETH-focused treasury firms that collectively control 4.7 million ETH. However, the report notes a breakdown in transparency and capital flows, with BitMine's stock down 10.17% for the quarter, reflecting retail losses. Technical indicators further support a bearish outlook, with ETH's weekly stochastic flashing topping signs and a false breakout from a multi-year wedge formation. If support near $3,000 fails, ETH could decline sharply to around $2,700, mirroring a false breakdown observed in March 2025.
Despite BitMine chair Tom Lee's bullish $10,000 price target for ETH, broader market caution persists following the October 10 crash, which wiped out $19 billion in crypto positions. Bitcoin, in contrast, remains resilient, with institutional capital favoring BTC over altcoins, signaling a possible cycle divergence where ETH's underperformance serves as a tactical hedge for BTC investors.
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