🚀 Ethereum (ETH) Rockets Past $3,500: Short Squeeze Meets Wall Street’s Crypto Craze

Ethereum just torched the bears—again. A blistering rally past $3,500 triggered a cascade of liquidations as institutional FOMO collided with overleveraged shorts. Here's why this isn't just another pump.

The Liquidation Domino Effect

When ETH breached $3,500, it wasn't just a psychological milestone—it was a margin call massacre. Over $200M in short positions got vaporized in 24 hours, creating rocket fuel for the next leg up.

Institutions Arrive Fashionably Late

BlackRock's ETH ETF approval last quarter opened the floodgates. Now pension funds and family offices are piling in—because nothing screams 'due diligence' like chasing 90-day returns.

The smart money's betting Ethereum's deflationary mechanics and L2 adoption will outlast the hype cycles. Or at least that's what they'll tell the SEC.

TLDR

• Ethereum (ETH) rallied 16% since July 14th, breaking above $3,500 with strong spot ETF inflows and on-chain activity
• Short liquidations on Binance are driving the rally, with multiple short squeezes exceeding $20 million in daily liquidations
• Top 10 companies hold 1.6 million ETH worth $5 billion, with SharpLink leading at 280.6k ETH
• Exchange reserves are falling while Open Interest rises, indicating accumulation and speculative activity
• Taker Buy/Sell Ratio crossed 1.00 threshold on Binance, showing stronger buy-side pressure from market participants

Ethereum has broken through the psychological $3,500 level this week, marking a strong recovery for the world’s second-largest cryptocurrency. The rally represents a 16% gain since July 14th, bringing ETH to trade just above $3,500 at current levels.

The move higher comes after ethereum successfully reclaimed and held the $3,000 support level earlier this week. Daily gains reached 7.7% while weekly performance shows gains exceeding 23%.

Multiple factors are contributing to the current price action. Spot ETF inflows have provided steady demand while on-chain activity has increased across the network.

Exchange reserves have been declining, indicating investors are moving their holdings to cold storage for long-term holding. This pattern typically signals accumulation phases in cryptocurrency markets.

Open Interest has been rising alongside the price gains. The combination of falling exchange reserves and rising Open Interest has pushed the Estimated Leverage Ratio to cycle highs.

Short Liquidations Fuel Rally

Short liquidations have emerged as a key driver of Ethereum’s recent price action. Analysis from CryptoQuant shows that bearish positions are being forced to close as prices MOVE higher.

The liquidation pattern marks a reversal from earlier in the year. During the first months of April, long liquidations dominated the market as prices declined.

Multiple short squeezes have occurred since May. Daily liquidation volumes have exceeded $20 million on several occasions, with some reaching $32 million and $35 million respectively.

Binance has been the primary exchange where these short liquidations are occurring. The forced closure of bearish positions adds buying pressure to the market.

The shift in liquidation patterns suggests many traders positioned against the trend. Their forced exits have inadvertently helped fuel the rally higher.

Corporate Holdings Provide Support

Corporate adoption continues to provide fundamental support for Ethereum’s price. The top 10 companies collectively hold 1.6 million ETH tokens.

These corporate reserves are worth approximately $5 billion at current prices. SharpLink leads the corporate holdings with 280.6k ETH in reserves.

The presence of large corporate holders provides a floor for the market. These institutions typically hold for longer time periods rather than engaging in active trading.

Additional corporate adoption could create billions of dollars in new demand. This institutional interest supports the long-term price outlook for Ethereum.

The combination of corporate reserves and spot ETF demand creates multiple sources of buying pressure. Both institutional and retail investors are showing interest in Ethereum as a store of value.

Market indicators suggest the rally may continue. The Taker Buy/Sell Ratio on Binance recently crossed above 1.00, indicating stronger buy-side pressure from market participants.

Price volatility has increased to 261.5, mirroring the recent surge past $3,400. This pattern of rising buy-side volume combined with increased volatility has historically preceded extended rallies.

The current price action follows a five-month correction period that began in December 2024. That correction phase helped reset speculative positioning and created the foundation for the current recovery.