Ethereum Short Squeeze Watch — Big Move Brewing
Current Price: 4,292.96 USDT (+1.71%)
Ethereum has been on a tear lately, blasting past the $4,000 mark for the first time since December 2024. That breakout didn’t just grab headlines — it wiped out a massive wave of short positions and set the stage for what could be an explosive short squeeze.
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Shorts Get Crushed
The moment $ETH broke above $4K, around $105M worth of short positions were liquidated, representing over half of all crypto short losses for the day. Prices pushed up toward $4,060 before cooling off slightly.
Some reports even put the figure closer to $119M in liquidations, with open interest climbing to near 3-year highs — a sign that a lot of traders are still heavily leveraged.
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Critical Resistance to Watch
Well-known traders like Ash Crypto have marked $4,100 as the key level. A clean break and hold above that line could ignite a rapid short squeeze, pushing ETH toward $4,400–$4,500 in a matter of hours.
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Why the Rally Has Legs
1. ETF Inflows & Institutional Interest
In just the last four trading days, spot Ethereum ETFs pulled in $537M — a huge signal of growing demand from big-money players.
2. Whale Accumulation & On-Chain Strength
Ethereum’s TVL in DeFi and staking has jumped sharply. With whales scooping up supply and liquid ETH becoming scarce, upward pressure builds.
3. Crowded Futures Shorts
Early July data showed leveraged funds stacked with shorts — over 12,574 short contracts vs. only 1,275 longs (around 51.7% of all open interest). That’s a setup that can flip hard if price runs higher.
The Risk Side
Overbought & Overheated
is coming off a 70% monthly surge, with RSI hitting a record 83.6 and funding rates soaring +248% — signs that the market may be stretched.
Seasonal Weakness
Historically, August and September haven’t been friendly to ETH, so traders should stay alert for pullbacks even if momentum feels unstoppable.
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Bottom Line
Ethereum is sitting in a high-voltage spot. A breakout above $4,100 could set off a vicious short squeeze, backed by ETF inflows, whale accumulation, and an overloaded short side in futures markets.
But with overbought indicators flashing and seasonal headwinds ahead, this rally isn’t without its risks#Bitlayer #BTCOvertakesAmazon #ETH4500Next? #BinanceAlphaAlert 