Ethereum News Today: Ethereum Surges 7% as Short Liquidations and Gamma Squeeze Fuel Bullish Momentum

Ethereum climbed nearly 7% in a single day on August 9, 2025, reaching $4,200, its highest level since December 2021. The surge was attributed to a combination of technical factors, including a breakout above the $4,000 resistance level and significant short liquidations that totaled approximately $207 million in ETH [1]. This forced buying activity acted as a key catalyst, accelerating the price movement and signaling a shift in market sentiment [1].

The ETH/BTC ratio also saw a notable increase, peaking at annual highs. This suggests a capital reallocation from Bitcoin to Ethereum, a pattern commonly observed during market cycles when one asset gains relative strength. Institutional interest appears to have intensified as well, with growing Ether treasury holdings reinforcing the narrative of increasing adoption and strategic investment [1].

Analysts highlighted the gamma squeeze dynamics at play, where negative gamma positioning in the options market historically amplifies price momentum. Such conditions, if sustained, could drive Ethereum higher unless volatility subsides. Some experts suggest that dealer hedging may push the price closer to $4,400, a level that traders and institutions are closely monitoring [1].

This price action echoes patterns seen during Ethereum’s December 2021 rally, particularly in terms of on-chain activity and capital rotation across the crypto market. The current surge could potentially lead to increased allocations in altcoins, following the wealth effect triggered by Ethereum’s rise. Miles Deutscher, a crypto analyst, noted that the short liquidations and rising ETH price could create a ripple effect across the broader crypto ecosystem, influencing trading behaviors and investment strategies [1].

While the move above $4,200 represents a significant psychological barrier, analysts caution that maintaining this level will be key to confirming a sustained bullish trend. If Ethereum can continue to trade above $4,200, it could attract further buying pressure and push toward the next target range of $4,200–$4,800. However, a retest of the $3,500–$3,600 support zone remains a possible scenario, with the outcome determining the direction of the next phase in the price trajectory [1].

The market remains sensitive to broader macroeconomic conditions and Ethereum’s on-chain activity. Short-term volatility persists, and traders are advised to remain cautious. As with any cryptocurrency investment, the potential for rapid price swings underscores the importance of risk management and informed decision-making [1].

Source: [1] Crypto Total Market Cap, $ Ideas — CRYPTOCAP:TOTAL (https://www.tradingview.com/symbols/TOTAL/ideas/)