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Ethereum Soars Past $2,700 as ETF Inflows Collide with Historic Long/Short Squeeze

Ethereum Soars Past $2,700 as ETF Inflows Collide with Historic Long/Short Squeeze

Published:
2025-07-10 00:00:45
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Ethereum regains $2,700 amid lowest long/short ratio in two years and ETF cash floods

Ethereum just punched through $2,700—and the timing couldn’t be more brutal for bears. With the long/short ratio hitting a two-year low, this isn’t just a rally—it’s a liquidation party.

Wall Street’s ETF cash tsunami meets crypto’s most lopsided trade. The result? A textbook short squeeze with extra volatility sauce.

Meanwhile, traditional finance guys are still trying to explain ‘gas fees’ at their morning standups. Some things never change.

Shifting derivatives

Derivatives positioning shifted the next day. Coinank data show the Binance ETH/USDT perpetual long-to-short ratio, the first print below parity since April 16, 2023, when the same metric bottomed at 0.94. 

Rising open interest alongside a new net-short balance implies fresh money entering the market rather than positions closing. 

Classical futures theory holds that increasing open interest combined with decisive price action confirms trend strength, while a divergence often precedes reversals. 

Q3 catalysts

Aby CF Benchmarks cited four drivers that could tighten supply-demand dynamics in the coming quarter. 

The first is the expectation of $10 billion in incremental ETF inflows as second-wave platforms launch. At the same time, the second is the potential staking enablement inside US spot ETFs, projected to draw an additional $5 billion to $7 billion. 

The report identified a third catalyst as the corporate treasury’s adoption, which may increase the number of public ETH-holding firms from 5 to 50. Wrapping up the catalysts is the block space demand from tokenized assets that “should lift fee burn and bolster the L1 yield profile.” 

The report framed these flows as supportive after a first half marked by elevated but orderly leverage and record CME participation.

Price discovery enters tight window

With ETFs absorbing spot supply and Binance futures showing contrasting signs, traders face a confluence that tends to accelerate price discovery. 

Whether the next decisive MOVE materializes through a long squeeze or a short cover will hinge on macro data and regulatory headlines. Still, the structural bid from regulated funds remains intact. 

The juxtaposition of persistent spot demand and a rare net-short bias in derivatives sets a measurable backdrop as the third quarter opens.

|Square

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