Ether (ETH) is 'making history' as its strong price increase has triggered a short squeeze that could go down in the record books.
According to the latest analysis from The Kobeissi Letter on Friday, the ETH/USD pair is expected to soon break above the $4,000 mark in the near future.
Short positions face significant risks as ETH moves towards the peak of 2025.
The overwhelming strength of Ether is becoming the most prominent highlight in the cryptocurrency market in July, as many altcoins are following Bitcoin in the recovery journey.
As the largest altcoin by market capitalization, Ether is causing short positions to struggle at an unprecedented rate – according to the latest report from Kobeissi Letter.
'Ethereum is making history – this is one of the largest short squeezes ever witnessed in the crypto world,' Kobeissi wrote on platform X (Twitter).
Since July 1st, in less than three weeks, the market capitalization of Ethereum has soared by an additional $150 billion, right after the net short positions reached a record high – setting the stage for a dramatic squeeze.
Data from TradingView shows that the ETH/USD pair surged by 20% in just one week, reaching $3,610 on the Bitstamp exchange – nearly approaching the highest peak since the beginning of the year. Compared to the low of 2025, the price of Ether has now increased by over 150%, asserting its leading position amid the altcoin recovery wave.
Currently, Kobeissi not only forecasts that the $4,000 mark is very close, but also emphasizes that the Ethereum short squeeze still shows no signs of cooling down.
If the price of Ethereum increases another 10%, the market will witness an additional approximately $1 billion in short positions forced to liquidate,” Kobeissi analyzed, citing data from the CoinGlass tracking platform.
'Notably, many short positions are using high leverage – a factor that could continue to increase buying pressure. Ethereum could very well reach the $4,000 mark in the near future.'
Bitcoin's dominance rate has dropped to its lowest level since March.
While Bitcoin continues to accumulate below the important psychological level of $120,000, a significant shift is occurring in the cryptocurrency market.
Capital flows are beginning to shift towards altcoins, as traders seek quicker profit opportunities beyond Bitcoin. This is clearly reflected in the decline in BTC's market dominance rate – a metric that had maintained an upward trend for many years – which has now dropped to 61.4%, the lowest since March.
'Just a 4.5% drop from the recent peak, we have seen a clear impact on altcoins and ALT/BTC pairs,' noted renowned analyst Daan Crypto Trades on platform X on Friday.
According to Daan, this decline largely stems from the outstanding performance of ETH and XRP, two altcoins that are prominent in the current phase.
However, he also issued a warning: 'When the market becomes too hot or shows signs of instability, capital will tend to return to defensive assets like BTC, cash, and stablecoins' – while relating the current situation to a scenario that occurred at the end of 2024.
