🚀 Ethereum breaks historical highs, shorts are crushed! What will the next wave of market be like?
Recently, Ethereum (ETH) has once again become the focus of the crypto world 🔥. After breaking through the historical high set in 2021, ETH successfully stood above the $4,900 mark. Although there was a slight pullback afterwards, as of the time of writing, the trading price remains around $4,655, with an increase of 8.2% over the past week.
This rise is significant 💡: after three years of consolidation and several breaches of highs, Ethereum has finally welcomed a true milestone rebound. Not only retail investors are cheering, but institutions are also starting to target this wave of market, leading to a clear shift in market sentiment—most ETH holders have returned to profitability 📈.
🏦 Institutional investment increases, Ethereum's 'value' skyrockets
The rise of ETH is not only driven by retail investors but also relies on the support from institutional funds. CryptoQuant analyst Oinonen pointed out that Ethereum is attracting more and more institutional attention, which means the market narrative is changing quietly.
In the past, Bitcoin has always been the preferred choice for institutional investors. However, as Ethereum's applications in DeFi (decentralized finance) continue to expand and with the influx of funds into spot ETH ETFs, ETH's status is challenging Bitcoin's dominance 💪.
For example: Bitmine Immersion Technologies acquired $6 billion worth of ETH in just two months! With this alone, ETH's market capitalization soared from $300 billion to $557 billion. In contrast, MicroStrategy only accumulated about $3 billion in Bitcoin during the same period, highlighting how astonishing the recent accumulation of ETH has been 💥.
This wave of institutional demand not only brought in capital but also indicates that Ethereum is being incorporated into professional portfolios, with changes occurring in both technical breakthroughs and investment structures. With ETF approvals and launches on multiple national platforms, this is an important milestone for ETH's global market position 🌍.
⚡ The short squeeze season has arrived
In addition to institutional buying, another key factor driving ETH's rise is the closing of short positions. For a long time, ETH has been a favored asset for short sellers. However, when the price unexpectedly breaks new highs, these bearish traders are forced to cover their ETH positions, creating what is known as a short squeeze (Short Squeeze) 🔥.
In simple terms: the more shorts there are, the more ETH is forced to be repurchased, the greater the buying pressure, and the easier it is for the price to be pushed higher. This is why ETH was able to quickly soar to $4,900 🚀.
Oinonen also reminds us: 'The market is entering the 'short squeeze season', and short-term increases may continue, but the accompanying volatility will also increase.' In other words, there may be greater price increases in the short term, but the risks are also rising ⚠️.
🧐 What does the future trend look like?
From a medium to long-term perspective, Oinonen expects Ethereum and Bitcoin to have further upside potential in the coming months 📈. However, he also warns that a market adjustment may occur from the end of 2025 to early 2026.
Overall, the future trend of ETH may depend on several key factors:
1️⃣ Whether institutional demand continues: If funds continue to flow in, the price may maintain an upward trend 💪
2️⃣ ETF fund flows: The inflow or outflow of spot ETFs will directly affect short-term volatility 💸
3️⃣ Dynamics of the derivatives market: Short covering, leveraged positions, etc., may amplify volatility ⚡
Overall, while short-term volatility may occur, the long-term trend remains supported by institutional funds and ETFs, with the bullish logic still in place.
🐂 Summary
ETH broke through the historical high of 2021 and stood above $4,900
Increased by 8.2% over the past week, resonating between retail and institutional investors
Institutional accumulation is significant, with market capitalization soaring to $557 billion
Short squeeze accelerates the price increase, but volatility rises ⚡
The bullish trend is still present in the coming months, but adjustments may occur from the end of 2025 to early 2026
Overall, Ethereum is like a released raptor 🦅, with shorts being squeezed and funds pouring in, making the next round of market worth looking forward to. But remember, high returns come with high risks ⚠️, so do not blindly chase highs and enter the market.
