- Ethereum is rallying above $4,560 with strong ETF inflows and institutional buying driving momentum.
- Analysts warn that $6B in short positions could be liquidated if ETH hits $4,900, potentially fueling a sharp squeeze.
- Global liquidity trends show Ethereum closely tracking monetary expansion, supporting the bull cycle.
- Institutional players like BitMine and U.S. spot ETFs are adding billions in ETH, signaling confidence in long-term growth.
- Key resistance stands at $4,900–$5,000, with support at $4,000–$4,100 as ETH eyes a possible run toward $7,000.
Liquidity and Macro Drivers
Ethereum (ETH) is showing renewed strength, trading above $4,560 as global liquidity expansion boosts risk assets. According to analyst Merlijn The Trader, Ethereum’s price has been closely following global M2 liquidity since mid-2025, signaling a strong macro-driven rally.
“The $ETH accumulation phase is history. Bull run phase is active,” he noted, warning that ignoring this signal could mean buying ETH at $7,000 instead of $4,400.
Also Read:Tether Just Minted 1 Billion USDT on Ethereum—Liquidity Surge Incoming?
This macro backdrop is being compounded by leverage in the derivatives market. Analyst Rekt Fencer highlighted that $6 billion in Ethereum shorts could be forced to close if ETH reaches $4,900. Such a short squeeze could accelerate upward momentum, pushing Ethereum into new price discovery.
Market Structure and Technical Levels
Ethereum’s market structure remains firmly bullish. Analyst Daan Crypto Trades observed that ETH briefly broke its all-time high before retracing, but its 4H trend remains strong after doubling since July.
He highlighted that the 4H 200MA/EMA is quickly catching up, acting as a technical floor, while $4,900 remains the crucial resistance. A successful breakout could pave the way for price discovery above $5,000, with support firmly established between $4,000–$4,100.
Institutional Buying and ETF Flows
Institutional activity is another major catalyst behind Ethereum’s surge. Corporate treasuries are increasingly favoring ETH over BTC. Notably, BitMine has accumulated 1.7 million ETH valued at $7.9 billion in just over two months—equivalent to 1.4% of total ETH supply.
Meanwhile, U.S. spot Ethereum ETFs are seeing record inflows, with over $2.8 billion entering funds in August alone. Last week, trading volumes for Ether treasuries even surpassed Bitcoin treasuries, highlighting Ethereum’s growing dominance in institutional portfolios.
Can Ethereum Hit $7,000 Next?
With shorts vulnerable, liquidity expanding, and institutions piling in, Ethereum looks poised for further upside. Analysts agree that a clean break above $5,000 would likely confirm the next leg of the Ethereum bull run, potentially sending ETH toward $7,000 in the coming months.
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