What happened to ETH that skyrocketed by 40% in three days?

In the past three days, ETH has shot up like a rocket, soaring 40% from around $1800 to $2600, leaving players in the crypto world in an uproar! Retail investors are confused while institutions are celebrating. What exactly is driving ETH's surge?

1. Three Major Drivers of ETH's Surge

Institutional Whales Going on a Buying Spree

In the past three days, institutions like Abraxas Capital have withdrawn nearly $400 million worth of 185,309 ETH from exchanges, accumulating nearly $700 million in ETH over the week! This is not just small trades from retail investors; it's clear that large funds are positioning themselves.

Short Squeeze, Fueling the Fire

This surge was essentially a “bloodbath” for short sellers! Many had shorted ETH starting from $3000, and when the market suddenly reversed, $10 billion in short positions were liquidated in a chain reaction, forcing shorts to cover their positions, which directly pushed prices higher.

2. Why is ETH So Strong?

This 40% surge appears to be a resonance of technical and capital factors, but there are deeper logical points worth noting:

Supply and Demand Imbalance: Institutions are hoarding coins, reducing the supply of ETH on exchanges, and the resulting imbalance is driving prices up. Technically, ETH has broken through the 50-day and 100-day moving averages, even challenging the 200-day moving average ($2600), with strong bullish momentum.

3. What’s the Outlook for the Future?

Short-term: ETH is currently around $2500. If it can hold and break through the 200-day moving average, the next target is the psychological level of $3000. $2300 is a key support level. It’s advisable not to chase the price blindly, but to wait for a pullback before entering.