Ethereum News Today: Ethereum Surges 9% to $3,330 Liquidating $152 Million in Shorts

Ethereum short contracts worth over $152 million were liquidated as the price of ETH surged by nearly 9% to over $3,330 on Wednesday. This liquidation accounted for more than half of the total $251 million worth of crypto shorts that were liquidated in the past day. In comparison, Bitcoin's more conservative 1.6% gain resulted in only $34 million worth of liquidated shorts. The price increase of Ethereum, the second-largest digital asset by market capitalization, comes as two companies significantly added to their Ethereum treasuries and amid increased optimism about the network's usefulness.

Patrick Gruhn, the founder of crypto derivatives platform Perpetuals.com, noted that the ETH price has been particularly sensitive and unpredictable due to recent regulatory news. This unpredictability has likely contributed to volatility in the crypto markets, primarily for Ethereum, as it is the largest smart contract-enabled blockchain. Gruhn highlighted that while the Crypto GENIUS Act, Clairty Act, and Anti-CBDC Act initially failed, they later passed in a dramatic standoff on the House floor.

Ethereum trading volumes jumped 15% in the past day to $132 billion, surpassing Bitcoin's $109 billion in volume over the same period. Ethereum open interest also surged by 9% in the same time frame. According to Glassnode analysts, Ethereum was the only top 10 asset, excluding stablecoins, with rising futures volume over the past 24 hours, growing by 27%. Open interest increased by 6%, while funding remained neutral at 0.0047%, suggesting fresh positioning without signs of excessive leverage.

Open interest, which is the total value of outstanding futures or options contracts yet to be settled, indicates that more traders are hedging the market when it increases. Neutral funding means that new futures contracts do not skew heavily bullish or bearish. Greg Magadini, director of derivatives at Amberdata, noted that for much of the year, ETH funding levels have not been neutral. He stated that the leverage demand for Ethereum was extremely low and negative for a significant portion of the year, indicating that most of the interest was short interest.

The surge in ETH's price and the liquidation of short contracts have led BitMEX founder Arthur Hayes to declare this period as “ETH szn.” Hayes wrote on X that Maelstrom Fund, his venture capital firm, plans to invest in “best in class for every DeFi vertical,” predicting that these investments will perform well if ETH continues to outperform.