How did ETH rise so dramatically?

The recent surge of 85,857,473,464 can be directly attributed to a large-scale short squeeze triggered by massive liquidations, but the deeper market logic comes from the resonance of multiple factors.

In the past 24 hours, the total liquidation amount across the network reached $1.014 billion, with ETH shorts accounting for over 70%. The tens of billions of dollars in short positions accumulated since the $3,000 mark were forced to close, creating a 'short covering → price increase → more short covering' death spiral.

After ETH broke through the key resistance level of $2,300, it triggered algorithmic trading buying orders, further amplifying volatility. After the mainnet upgrade on May 7th, Layer 2 network transaction costs decreased by 62%, and the increase in Blob capacity directly pushed the user base of ecological projects like Arbitrum to over 5 million. The optimization of the staking unlock mechanism has made ETH's staking ratio reach 35% of the circulating supply, with annualized returns rising to 4.5%-6.2%, attracting institutional allocation demand.

After Bitcoin broke through $100,000, funds began to flow into value laggards like ETH, with the ETH/BTC exchange rate rising from 0.046 to 0.055. BlackRock's Ethereum ETF filing added physical redemption terms, and the Grayscale ETHE fund's premium rate rose to 12%, signifying the start of institutional accumulation.

Federal Reserve Governor Waller hinted that the interest rate hike cycle is nearing its end, accelerating funds into risk assets. The current RSI is at 65, close to the overbought zone, with Fibonacci resistance around $2,425, so caution is needed for a 10%-15% pullback risk. The daily unlock amount of 80,000 ETH may translate into short-term selling pressure, necessitating monitoring of net inflow data from exchanges.

The current market situation is essentially a combination of technical breakthroughs, ecological upgrades, and capital rotation, but under extreme volatility, it is recommended to adopt a profit rolling strategy, partially taking profits on the principal, while retaining profit positions to target the $2,500-$2,700 range.

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