📣 Ethereum Reclaims $2,500 In Squeeze-Driven Rally – But Can It Hold?

Ethereum ($ETH ) has recorded strong gains over the past two weeks, rising from $2,111 on June 12 to $2,515 on June 25, reigniting hopes for a sustained bullish rally that could push the digital asset beyond the crucial $3,000 level.

🔸 Ethereum Rally Marked By Shift In Dynamics

Recent data from #Binance reveals a significant shift in ETH funding rates from negative to positive. Positive funding rates typically indicate that traders are opening or holding leveraged long positions, reflecting expectations of further upside.

However, rising funding rates may also raise the risk of a short-term price pullback if long positions become overextended. That 68.15% of liquidations over the past 24 hours were long positions – highlighting this risk.

Taha also emphasized the role of a short squeeze in #Ethereum ’s recent price surge and the increase in funding rates. As ETH’s price climbed, it retested the previous short-squeeze zone around $2,500. He explained:

In that earlier event, short positions were forcibly closed by initiating aggressive market buy orders to cover their exposure, triggering a cascading effect known as a short squeeze. This dynamic occurs when traders who had bet against ETH (shorts) are forced to close their positions by aggressively buying back the asset to limit losses.

#ETH inflows to Binance have also spiked. On-chain exchange data suggests that 177,000 ETH was deposited into Binance over a three-day period – an unusually high volume.

Such a surge typically signals increased selling pressure or large-scale repositioning by major holders. Large transfers of ETH to exchanges often precede either potential sell-offs or liquidity provisioning.

In conclusion, Taha noted that while a short-term correction may be likely, ETH’s breakout above $2,500 underscores the aggressive speculative activity driving its recent price action. Traders are advised to closely monitor funding rates and exchange flows for signs of an impending retracement.