The market is witnessing a historic moment! With rising expectations of interest rate cuts from the Federal Reserve and institutions aggressively buying, Ethereum (ETH) broke through $3889 on August 8. Although it has slightly retraced, on-chain data shows that whales and institutions are working together to build an epic bullish defense.
BlackRock's ETH spot ETF holdings have surpassed 3 million coins, worth $11.3 billion, with the weekly increase five times that of Bitcoin. The $2.3 billion short position accumulated in the $3600-3800 range is becoming a powder keg that the bulls could ignite at any moment.
Technical analysis: Pullback builds momentum, key support creates a golden pit. The 4-hour K-line shows ETH has retraced from a high of $3937 to around $3650, but the volume-price divergence hides reversal signals. Trading volume has shrunk to $36.2 billion, a new annual low, while the MACD histogram continues to narrow, and the KDJ indicator is flattening around 23, suggesting the exhaustion of short forces.
$3489, the 200-day moving average, and the $3620, the 24-hour low, form a dual support. If it stabilizes above the $3736 resistance level, the short-term target is directly aimed at $4000. If it dips to $3470, it will be a once-in-a-decade opportunity to buy.
Fundamentals: Institutional influx reshapes market dynamics. Global capital is rewriting cryptocurrency rules. In July, ETH spot ETF net inflows reached $5.43 billion, a year-on-year increase of 369%. Asset management giants like BlackRock and Fidelity are aggressively accumulating through ETF channels, directly boosting the total locked value (TVL) in DeFi to $153 billion.
More significantly, the SEC has clarified that LST liquidity staking tokens do not constitute securities, clearing regulatory obstacles for platforms like Lido and Coinbase. The implementation of EIP-4844 shard technology has reduced Layer 2 transaction costs by 90%, with daily cross-chain transaction volumes exceeding 1.2 million, fully activating the ecosystem.
Game theory: A short squeeze storm is imminent. The long-short battle in the derivatives market has escalated. Platforms like Bybit and OKX have gathered $2.3 billion in short positions in the $3600-3800 range. If ETH breaks through $3736, these positions will be forcibly liquidated, creating a positive feedback loop of 'price increase → short squeeze → buying pressure'. On-chain data shows that addresses holding 1,000 to 100,000 ETH have increased their holdings by 167,000 coins, with retail wallet net inflows surging by 42%. A rare alliance between whales and small players is strangling the shorts.
My conclusion is to seize this once-in-a-decade wealth window. In the short term, $3736 is the line of life and death for bulls and bears. If it breaks through, expect a surge to $4000 within 48 hours. If it retraces to $3620, decisively increase positions. In the long term, as institutional holdings exceed 5% of circulation, ETH is transforming from a speculative asset to digital gold.
Q3 2025 will witness ETH breaking historical highs, aiming for $6000 by the end of the year—this is not only a technical inevitability but also part of the historical migration of global capital towards digital assets.
Now is the time to act. Set a breakout alert at $3736 and prepare for a short squeeze. Buy ETH on dips and allocate bullish options to hedge risks.
If ETH breaks below the $3470 support, decisively cut losses and wait for a trend reversal.
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