Ethereum (ETH) has finally broken through the psychological barrier of $4,000 — for the first time since December 2024 — sending shockwaves through the market. In a single hour, over $24 million worth of short positions were liquidated. Over the past 24 hours, liquidations surpassed $119 million, the majority coming from shorts caught off guard by the sudden surge.
Derivatives Market Heats Up as Open Interest Nears Record High
Following this buying frenzy, ETH open interest now hovers around $26.65 billion — approaching a three-year high. In the past 24 hours alone, it rose by 6.8%, with long positions accumulating above the $3,850 level.
In the last three months, ETH has gained over 62%, with the most significant rally starting in July. On Gate.io, ETH briefly surged to $4,001, while Binance showed a peak of $4,012.
Short Sellers Trapped: Bullish Momentum Takes Over
On derivatives platform Hyperliquid, the recent price explosion flipped sentiment dramatically: more than 29,000 traders hold long positions, compared to just 14,000 still betting against the price. The largest short position, with a nominal value of $339 million, is currently underwater by over $35 million.
Ethereum Attracting Capital and Investor Attention
ETH's rally is fueled by record spot demand — especially from whales — and heightened interest in derivatives. This powerful combination ended months of sideways trading. Against Bitcoin, ETH climbed to 0.033 BTC, outpacing the king of crypto in momentum.
Currently, ETH’s market dominance has risen to 12.1%, reviving hopes for a potential altcoin season.
Sentiment Turns Euphoric — Perhaps Too Much
While "crowd money" (retail investors) are celebrating, smart money is becoming cautious. Extreme optimism can sometimes signal market overheating. Still, more than 95% of ETH holders are currently in profit, and selling pressure remains low. Whales have already set a higher price floor, and further gains are expected.
According to Kaito data, this is the most bullish sentiment ETH has seen in the last 12 months. Just months ago, ETH dropped as low as $1,400 — making this rebound a staggering 180% turnaround.
A Launchpad for DeFi?
As ETH rises, so does the total value locked (TVL) in DeFi protocols — now over $86 billion, a level not seen since early 2022.
Booming demand for borrowing and staking ETH is reducing available supply on exchanges. Freshly minted tokens are quickly moved to accumulation addresses or locked in staking and wrapping protocols.
Next Stop: All-Time High?
Although ETH has reclaimed the $4,000 zone, the market is still testing resistance. If this barrier is decisively broken, Ethereum could target the short-term prediction of $5,000 — and potentially beyond.
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