Ether Surges 43% to 15-Week High on Short Liquidations

Ether, the native cryptocurrency of the Ethereum blockchain, has recently surged to a 15-week high, reaching $2,827 on June 10. This price level marks the highest point for Ether since February, indicating a significant rally in the cryptocurrency market. The surge in Ether's price has been accompanied by a record open interest of $40 billion, reflecting heightened market activity and investor confidence.

The recent price movement has been driven by several factors, including the liquidation of short positions worth $1.8 billion. Short liquidations occur when traders who have bet against the price of Ether are forced to close their positions, often leading to a further increase in the asset's price. This phenomenon has raised questions about whether the current momentum can propel Ether above the $3,000 mark.

Market analysts have noted that the sustained price rally above $2,800 suggests a bullish sentiment among traders, despite some bearish options strategies. The Ethereum network's growth, coupled with inflows into spot Ether ETFs, has attracted new investors and contributed to the positive market sentiment. Additionally, the amount of staked Ethereum has reached an all-time high, with nearly 30% of the current circulating supply now locked in staking contracts. This indicates a strong commitment from investors to the Ethereum ecosystem and its long-term prospects.

One notable event during this rally was the activity of an Ethereum whale, who made significant profits through strategic trades. The whale sold 30,000 ETH for $82.76 million through an over-the-counter (OTC) trade on June 10, locking in a $7.3 million profit. This sale followed a $75.56 million ETH purchase on May 27. The whale had previously bought 30,000 ETH for $54.9 million at $1,830 via Wintermute OTC on April 27 and sold it at $2,621 for $78.63 million on May 22, netting $23.73 million amid a 43% price rally. In total, the whale secured $31 million in profits within just 44 days.

The number of unique addresses on the Ethereum network reached an all-time high of 17.4 million earlier this month. Data highlighted that the number of ETH addresses interacting with one or multiple chains has increased by 70.5% since the beginning of Q2. The Base network led this significant growth, accounting for 72.81% of 11.29 million this week, with Ethereum’s mainnet recording 2.23 million addresses or 14.8%.

Ethereum continued to dominate the decentralized finance (DeFi) sector, with ETH holding a 61% share of the total value locked (TVL) with roughly $66 billion. However, concerns remain for its sustainability due to only having $43.3 million in fees over the last 30 days. Recent updates favoring rollups with low-cost data packets (blobs) have reduced staker returns, as ETH’s supply reduction relies heavily on network fees.

Despite the risks, liquidity dynamics remain balanced. Data shows $2 billion in long positions facing liquidation at $2,600, while $1.8 billion in shorts risk liquidation at $2,900. This equilibrium leaves market makers’ next move uncertain, as they could chase liquidity on either side.

In summary, Ether's recent price surge to a 15-week high, driven by short liquidations and record open interest, has positioned the cryptocurrency for potential further gains. The bullish market sentiment, supported by network growth and investor inflows, suggests that Ether could continue its upward trajectory. However, it remains to be seen whether the current momentum will be sufficient to push the price above the $3,000 threshold.