Ethereum Short Squeeze Sparks Bullish Rally Toward $4,000
Ethereum short squeeze intensifies as leveraged short positions exceed $1 billion, with another 10% price rise potentially triggering additional liquidations. ETH has rallied about 20% over the past week to $3,610 on Bitstamp, building on a 150% YTD gain. Funding rates on perpetual swaps have flipped positive, and derivatives open interest is at multi-month highs. Bulls cite a MACD golden cross, RSI above 60, reduced sell pressure from EIP-1559 burns, and the upcoming Shanghai upgrade as catalysts. Bitcoin dominance has dipped to 61.4%, prompting capital rotation into altcoins like ETH and XRP. Analysts see Ethereum aiming for $4,000—up 15–20%—but warn of risks from U.S. monetary policy shifts and large‐scale profit‐taking. Traders should monitor funding rates, open interest, liquidation levels, and BTC dominance to gauge momentum and manage risk.
Bullish
Ethereum’s ongoing short squeeze, with over $1 billion in leveraged shorts at risk, combined with positive funding rates, rising open interest, bullish technical signals (MACD golden cross, RSI >60), reduced sell pressure from EIP-1559 burns, and the upcoming Shanghai upgrade, underpin strong upward momentum. The recent 20% weekly rally and rotation of capital into ETH alongside low Bitcoin dominance further support a bullish outlook. In the short term, forced liquidations and positive market sentiment could drive ETH toward $4,000. Over the long term, network upgrades and continued altcoin momentum may sustain gains, though traders must monitor U.S. monetary policy shifts and potential profit-taking as key risk factors.