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Ethereum is displaying renewed vigor following a swift surge of more than 50% in under a week, propelling prices firmly past the $3,700 mark. This movement indicates clear bullish dominance, with ETH reclaiming vital ground and maintaining stability near recent peaks. The rapid price increase has reinstated optimism throughout the market, as traders and analysts carefully monitor for continuation or signs of fatigue.
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At present, Ethereum’s momentum indicates that bulls are gearing up to confront the psychological $4,000 threshold. Based on significant derivatives data, this level signifies a crucial pressure point for bearish positions. If achieved, substantial short positions could be liquidated, possibly igniting even further upward momentum through a domino effect of enforced buybacks.
Market participants are seeking confirmation through volume growth and subsequent purchasing pressure. A definitive break above $3,800 may pave the way to $4,000 and beyond, while not maintaining support might prompt a temporary pullback. Regardless, Ethereum’s current arrangement implies that notable volatility and opportunity are on the horizon.
Major Short Liquidation Imminent As Ethereum Eyes $4,000
Ethereum’s recent surge has exerted pressure on short-sellers, and leading analyst Ted Pillows has emphasized a key level that could trigger a significant squeeze. According to Pillows, about $331,170,000 in short positions will face liquidation if ETH reaches the $4,000 price point. This data point illustrates a highly asymmetrical setup where a single upward thrust could activate a cascade of forced buybacks, propelling even more upward movement.
In cryptocurrency markets, when short positions are liquidated, traders are compelled to repurchase the asset to cover their losses. This automatic purchasing boosts the existing demand and can rapidly enhance the price movement, resulting in what is known as a short squeeze. With shorts concentrated at $4,000, a clear breach above this level could trigger a sudden and forceful price spike, catching bears off balance and further shifting momentum in favor of the bulls.
Besides technical triggers, Ethereum is also reaping benefits from improving macroeconomic conditions. Legal clarity in the US — through recent legislation such as the Clarity and GENIUS Acts — is diminishing regulatory ambiguity for both projects and investors. Coupled with increasing ETF inflows and surging on-chain activity, these elements suggest Ethereum might be entering the preliminary stages of a much larger expansion phase. As the $4,000 level approaches, all attention is now directed towards whether this critical threshold will serve as a catalyst for Ethereum’s subsequent significant advance.
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ETH Looks to Breakout As Momentum Strengthens
Ethereum (ETH) continues to demonstrate impressive strength, currently trading around $3,817.49 after increasing by 1.57% for the day. The chart illustrates a robust upward trajectory, with ETH soaring past significant resistance near $2,850. The recent breakout has been underpinned by solid volume, validating bullish conviction as Ethereum swiftly approaches the psychological $4,000 threshold.
The 50-day, 100-day, and 200-day moving averages are all trending upwards, further affirming the ongoing uptrend. ETH is substantially above all key SMAs—specifically the 200-day SMA at $2,824.88—which now serves as robust macro support. The next challenge lies just above current levels in the $3,850–$4,000 zone, a historically significant resistance area. A breakout here could ignite a larger movement, potentially leading to new annual highs.
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Nonetheless, traders should exercise caution. After a surge of over 50% in just a few days, a period of consolidation or a brief pullback wouldn’t be out of the ordinary. If Ethereum is unable to break and maintain levels above $4,000, we could witness a retest of the $3,742 support.
Featured image from Dall-E, chart from TradingView
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