Ethereum’s bullish run intensified heading into the weekend as the second-largest cryptocurrency surged above $3,600, marking a weekly gain of more than 20%. The latest price boost was triggered by a wave of short liquidations totaling over $136 million, as well as increasing optimism around ETF inflows and crypto legislation in the U.S.
According to Derive.xyz, an onchain options analytics platform, aggressive option positioning around the $4,000 strike suggests that traders are betting big on further upside before the July 25 expiry. Dr. Sean Dawson, Head of Research at Derive, described the ETH price movement as a “regime change,” with data showing about 25% of ether options volume since Wednesday focusing on the $3,000–$4,000 call range.
“BTC is participating, but this rally belongs to ETH,” said Dawson. “The technical setup, option flows, and short squeeze dynamics point to a structural repositioning in Ethereum’s favor.”
Short Liquidations Ignite Bullish Momentum
The rapid rally was catalyzed by short liquidations, which accelerated as ETH broke through key resistance zones. According to Coinglass, more than $136 million in short positions were wiped out in 24 hours, contributing to a squeeze that pushed Ethereum above $3,600.
Meanwhile, Derive data indicates 8% of all open interest on their platform for the July 25 expiry is now concentrated at the $4,000 strike. Dawson estimates a 14% chance ETH closes the month above $4,000 and a 27% chance it ends 2025 above $5,000.
ETF Inflows and Regulatory Clarity Boost Sentiment
Wall Street’s interest in Ethereum remained high as institutional inflows into crypto funds continued to soar. Ether-based ETFs attracted over $600 million in net inflows on Thursday, outpacing Bitcoin spot ETFs which drew around $523 million, according to The Block’s dashboard.
This trend highlights Ethereum’s increasing appeal to institutional investors, particularly in light of regulatory progress in the U.S. Bipartisan backing has pushed the GENIUS Act to the President’s desk and advanced the Clarity Act to the Senate—both seen as positive steps toward more defined crypto regulations.
The total crypto market cap also reached $4 trillion for the first time, underlining a surge in overall investor confidence.
Market Conditions: Optimistic, But Not Euphoric
Valentin Fournier, lead research analyst at BRN, noted that market sentiment is elevated but has not yet entered euphoric territory. The Fear & Greed Index currently reads 71 out of 100, signaling strong bullishness without excessive froth.
“Despite the sharp gains, we expect institutional flows and legislative clarity to support continued upward momentum,” said Fournier. “We remain overweight on altcoins—especially Ethereum and Solana—due to their strong institutional demand.”
He cautioned, however, that signs of market overheating are emerging, and new highs may invite profit-taking, particularly among altcoins. Still, the broader uptrend remains intact, backed by macro and structural tailwinds.
Bitcoin Consolidates Near Record Levels
While Ethereum stole the spotlight, Bitcoin traded just below $120,000, consolidating after a strong multi-week rally. Glassnode highlighted that BTC has hit the +1 Standard Deviation zone above the short-term holder cost basis, which often acts as near-term resistance.
Despite this, BTC remains close to its all-time high, with the next significant resistance level expected around $136,000, indicating potential for further gains.
Conclusion: ETH Eyes $4,000 as Market Repricing Accelerates
With the combination of massive short liquidations, institutional capital flows, and regulatory clarity, Ethereum is leading the current crypto market breakout. Traders are watching the $4,000 level closely as a key milestone before the end of July, while long-term projections see even higher targets by year-end.
Ethereum’s rally appears to be more than just a price spike—it could be the start of a new structural shift in crypto markets where ETH continues to gain favor among retail and institutional investors alike.
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