Ethereum (ETH) is on a strong rally, trading above $4,560 with billions in short positions at risk. Institutional buying, heavy ETF inflows, and improving liquidity are fueling the move.
$6 Billion in Shorts Near Liquidation
Analysts warn that over $6 billion in Ethereum shorts could be liquidated if ETH reaches $4,900. A breakout at this level may trigger a massive short squeeze, adding to the bullish momentum.
Ethereum has already jumped 4% in the past day and nearly 9% this week, making a test of that resistance level increasingly likely.
Liquidity and Market Drivers
Global liquidity continues to expand, supporting risk assets like Ethereum. Analyst Merlijn The Trader noted that ETH price action mirrors global M2 liquidity trends.
He stated:
“The $ETH accumulation phase is history. Bull run phase is active.”
ETHEREUM IS TRACKING GLOBAL LIQUIDITY
The $ETH Accumulation phase is history.
Bull run phase is active.Liquidity curls higher and Ethereum follows.
This is not “hopium.” This is macro.Ignore this signal, and you’ll be buying ETH at $7K instead of $4.4K. pic.twitter.com/5u9qnJgPjo
— Merlijn The Trader (@MerlijnTrader) August 26, 2025
This correlation between liquidity and ETH performance suggests more upside if macro conditions remain favorable.
Technical Levels to Watch
Ethereum’s market structure remains bullish:
- Resistance: $4,900 – breaking this could open the door to $7,000.
- Support: $4,000–$4,100 – holding this zone keeps the trend intact.
- Breakout Confirmation: Above $5,000, ETH could enter a new phase of price discovery.
Analyst Daan Crypto Trades highlighted that ETH recently tested all-time highs and is still doubling from July levels without retesting lower ranges.
Institutional Demand and ETF Inflows
Institutional accumulation is accelerating Ethereum’s rally. BitMine has bought 1.7 million ETH worth $7.9 billion in just two months—representing 1.4% of supply.
U.S. spot Ethereum ETFs are also seeing strong demand. In August alone, more than $2.8 billion flowed into ETH spot funds, with volumes recently surpassing Bitcoin funds.
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