1. The Triple Driving Engines of Price Breakthrough (Based on Real-time Data from July 18, 2025)
1. Catalysts for Regulatory Certainty
- Passage of the GENIUS Act: On July 17, the U.S. House of Representatives passed the stablecoin regulation act, clearly stating that stablecoins must be backed 1:1 by USD or government bonds, providing a compliance framework for mainstream stablecoins like USDT and USDC (Summary 1, 6). This act directly eliminated the legal barriers for institutions to allocate crypto assets, triggering a capital inflow. Data shows that within 24 hours after the act's passage, the market cap of USDT increased by $2.3 billion, and on-chain stablecoin transfer volume surged by 127% (Summary 6).
- Sovereign Capital Entry: El Salvador announced an increase of 50,000 ETH (approximately $180 million) and plans to include ETH in the national foreign exchange reserve portfolio (Summary 5). This demonstration effect of 'digital fiat currency' has stimulated other emerging market countries to follow suit.
2. Epic Accumulation of Institutional Funds
- ETF Fund Influx: On July 18, nine U.S. spot ETH ETFs saw a net inflow of $727 million in a single day, with BlackRock's product contributing $499 million (Summary 5). This led to total holdings of ETH ETFs exceeding 1.6 million (approximately $50.7 billion), accounting for 0.76% of the circulating supply (on-chain data).
- Corporate Accumulation: BitMine Immersion, supported by PayPal co-founder Peter Thiel, increased its ETH holdings by $500 million, with total holdings exceeding $1 billion (Summary 5). SharpLink Gaming, the largest corporate holder of ETH globally, has holdings of 280,000 ETH (approximately $890 million) and plans to continue accumulating (Summary 10).
- Traditional Finance On-chain Migration: Visa expanded its USDC settlement scale to daily tens of billions, and Morgan Stanley is piloting a tokenized money market fund using Ethereum L2 solutions (Summary 11). Institutional wallets interacting with OP Stack chains have increased by 700% month-over-month (Summary 11).
3. Release of Deflationary Effects from Technological Upgrades
- Long-term Benefits of Pectra Upgrade: The Pectra upgrade completed in May 2025 doubled the Blob capacity of Layer2, reducing L2 transaction costs by 90% and stimulating a surge in on-chain activities (Summary 12, 13). Data shows that after the upgrade, the ETH burn rate increased by 37%, with a single-day burn of 1,240 ETH (approximately $446,000) on July 18, raising the annual deflation rate to -1.2% (on-chain data).
- Acceleration of Layer2 Scaling: L2 networks like Arbitrum and Optimism saw average daily transactions exceed 2 million in July, a 68% increase compared to before the upgrade (Summary 14). This scaling effect directly enhanced ETH's value capture ability as the 'Layer1 settlement layer.'
2. Disruptive Changes in Market Structure (Latest Data from July 2025)
3. The Historical Significance of Breaking $3600 and Risk Warnings
1. Milestone Breakthrough on the Technical Front
- Key Resistance Level Transformation: $3600 is the historical peak formed in November 2024, and this breakthrough marks ETH's official entry into a 'new bull market cycle.' The 4-hour chart shows that after the breakout, ETH pulled back to $3520 (EMA13 support), forming a 'head and shoulders bottom' pattern, with a target pointing to $4200 (0.618 Fibonacci extension, Summary 8).
- Market Sentiment Reversal: The topic of '#ETH breaks $3600' on platform X has surpassed 500,000 discussions, and the Fear and Greed Index jumped from 62 (neutral) to 85 (extreme greed, Summary 8). On-chain data shows that whale addresses (holding over 10,000 ETH) increased their holdings by 407,500 ETH in July, a new high for the year (Summary 5).
2. Risks and Challenges
- Short-term Pullback Pressure: The short-term RSI (14) for ETH reached 78, entering the overbought zone, which may trigger technical sell-offs. Historical data shows that in the past three instances of breaking key resistance levels, the average retracement was 8-12% (on-chain statistics).
- Regulatory Uncertainty: Although the GENIUS Act has passed, Trump has yet to sign it. If he proposes amendments, it may cause market volatility (Summary 6). Additionally, the SEC's risk of classifying L2 as securities has not been resolved (Summary 14).
- Competitive Chain Diversion Effect: Solana, with its high throughput (65,000 TPS) and low fees ($0.0002 per transaction), attracts DeFi and NFT projects, with on-chain trading volume in July reaching 38% of ETH's (Summary 11). Tron’s market share in the stablecoin market has risen to 18%, creating competition for USDT liquidity (Summary 6).
4. Investor Strategies: From Price Breakthrough to Value Capture
1. Institutional Fund Tracking Methods
- On-chain Signals: Monitor Glassnode's 'Whale Holding Changes' indicator. If holdings decrease more than 1% for three consecutive days, it may indicate a short-term pullback. Also, pay attention to the funding rates of ETH/USDT perpetual contracts; if it stays above 0.05%, be wary of overheated bulls (Summary 8).
- ETF Flows: Track ETH ETF fund inflows using CoinShares data. A net inflow exceeding $500 million in a single day can be seen as a short-term bullish signal (Summary 5).
2. Technical Operation Suggestions
- Support and Resistance Levels:
- Short-term Support: $3520 (EMA13), $3450 (daily Bollinger Band middle line)
- Short-term Resistance: $3750 (historical peak of 2024), $3880 (0.786 Fibonacci extension)
- Position Management:
- Long-term Holders: Continue to hold core positions and consider converting 5-10% of profits into BTC to hedge risks.
- Swing Traders: Accumulate in batches in the $3550-$3600 range, with a stop loss set below $3480, targeting $3750 (Summary 8).
- Derivatives Strategy: Buy $3600 call options expiring in September while selling $3800 call options to construct a bull spread strategy, reducing premium costs (Summary 5).
3. Long-term Value Anchoring
- Staking Rewards: Stake ETH through liquid staking protocols like Lido, with stable annual yields of 4.2% (Summary 12). If ETH prices continue to rise, the staked LP tokens (like stETH) can enjoy dual appreciation from 'price + yield.'
- Participation in Layer2 Ecosystem: Invest in native tokens of OP Stack chains (like OP, ARB), or participate in L2 liquidity mining through cross-chain bridges (like GMX on Arbitrum, Synthetix on Optimism) to share in the scaling dividends (Summary 14).
- Real-World Asset (RWA) Layout: Focus on RWA platforms like Ondo Finance, which has reached a tokenized scale of $215 million in government bonds on the Solana chain (Summary 11), and may migrate to Ethereum L2 in the future.
5. Conclusion: The Paradigm Shift of ETH and Ecological Moat
ETH breaking $3600 is not a short-term speculation but a result of the **resonance of three logics: technological upgrades, regulatory implementation, and capital migration**. Its positioning as a 'global asset on-chain operating system' has been recognized by institutions, with the on-chain financial asset scale (stablecoins + RWA + DeFi) reaching $1.2 trillion (Summary 11), forming an unshakeable network effect. Despite short-term pullback risks, its long-term scarcity (annual deflation rate -1.2%) and ecological expansion potential (Layer2 + RWA) make it likely to challenge the historical peak of $4600 in the second half of 2025. For investors, **building core positions during pullbacks + participating in Layer2 ecosystems + being cautious of competitive chain diversion** will be key to seizing this bull market.
