The price surge of Ethereum (ETH) above $4,000 has triggered a significant wave of Short position liquidations, reflecting an increasingly strong demand for the leading altcoin.
On-chain data indicates that interest and accumulation are recovering, signaling that Short Sellers may continue to incur losses if the price of ETH maintains its upward trend.
ETH surpassed the $4,000 mark thanks to a strong resurgence in buying.
The new wave of demand for ETH has pushed the price up 18% in the past week. Strong buying momentum and improved market sentiment have pushed the price above $4,000 yesterday, triggering a wave of liquidations from Short Sellers.
According to data from Coinglass, the total value of Short liquidations reached $184 million in the past 24 hours, while Long liquidations were more modest at around $24 million.
This indicates the level of stress from the Short Squeeze as traders rush to close positions amid a strong market rise.
However, on-chain data shows that this group of investors may still face additional losses as ETH is forecasted to continue rising.
For example, the OI (open interest) of ETH futures contracts has increased alongside the price, showing a strong level of market participation. As of the time of writing, this figure reached $51.61 billion, up 10% in the past 24 hours.
The OI of the asset measures the total number of futures or options contracts outstanding in the market. When both price and OI rise, it indicates that traders are very confident that the current trend will continue.
For ETH, this indicates many investors are actively opening new positions and are confident in the current price uptrend.
Moreover, the return of capital flow from institutions further reinforces this bullish outlook. According to SosoValue, this week recorded a return of capital to Ethereum ETF funds as market sentiment improved.
From August 4 to 8, these funds recorded a total inflow of $326.83 million.
The new wave of capital from institutions shows restored confidence from major investors, creating an important support layer that could help maintain the upward momentum of ETH in the short term.
ETH holds firm at the $3,909 support — the next target is $4,430 and beyond.
At the time of writing, ETH is trading at $4,169, maintaining a newly formed support area near $3,909. If this support area is reinforced and buying pressure continues to increase, the price of ETH could aim for $4,430, with the potential to test and break through this resistance level.
A successful breakout will pave the way for ETH to return to its historical peak of $4,827.
Conversely, if buying pressure weakens, ETH could lose momentum and reverse the current upward trend. Failing to hold the $3,909 support area will push the price down to $3,340.