Ethereum News Today: Ethereum Could Force $6B Short Covering as Bullish Setup Intensifies

$7.23B Short Positions at Risk if ETH Hits $4,800

Ethereum (ETH) faces a significant risk of short liquidations if the price surges to $4,800, potentially triggering a $7.23 billion short squeeze. The current trading price near $4,618 indicates that a 7% upward move could push ETH toward its previous all-time high of $4,958. Such a move would force traders with leveraged short positions to cover their bets, potentially accelerating the price higher as these positions are liquidated [1]. Analysts have noted that the market is currently loaded with over $4.42 billion in cumulative short leverage, which could be triggered by a strong breakout [1].

The risk is not uniformly distributed across the market. Major exchanges such as Binance and OKX are holding $47.97 million in potential liquidations from short positions, indicating concentrated leverage that could cause a domino effect once the price passes critical thresholds [1]. This scenario highlights the potential for a sharp, rapid increase in ETH’s price, particularly if the market begins to experience cascading forced buybacks [1].

Macroeconomic indicators suggest that Ethereum is closely tracking global liquidity levels, particularly the M2 money supply. Analyst Merlijn The Trader has pointed out that Ethereum’s price has been in sync with liquidity expansions since mid-2025, and has warned that ignoring this signal could lead to buying ETH at significantly higher prices [2]. In addition, the market is witnessing strong inflows into spot ETH ETFs in the United States, with over $2.8 billion entering these funds in August alone [2]. These inflows, combined with institutional demand, are reinforcing bullish sentiment.

From a technical perspective, Ethereum has been trading in a tight range between $4,520 and $4,720 recently. While the price has failed to maintain its push toward $4,950, the overall structure remains bullish, with higher lows compared to mid-August [3]. The key resistance level is $4,900, and a sustained move above $5,000 would likely signal a new phase of price discovery. However, any significant drop below $4,400–$4,100 could reverse the current bullish trend [3].

Market positioning data further underscores the risk of a short squeeze. Net shorts have reached over 4.0 million, reflecting a bearish outlook among traders who are increasingly shorting ETH on rallies. However, this concentrated short position also creates an environment where a sudden upward move could force traders to cover their positions quickly, potentially amplifying the price increase [3]. The open interest (OI) has also seen a cooling-off trend, pulling back toward 2.07 million, suggesting that traders are de-risking and preparing for a stronger directional move [3].

The coming 24–48 hours will be critical for ETH. A breakout above $4,720 could initiate a run toward $4,850–$4,900 and possibly retest the $4,950 peak. Conversely, a breakdown below $4,520 could lead to a return to the $4,400 level or even lower if selling pressure intensifies [3]. With over $6 billion in shorts at risk of liquidation if the price reaches $4,900, the potential for a short squeeze remains a powerful catalyst for further upward momentum [2].

Source: [1] ETH News Could Trigger $4.65B Short Squeeze if ATH is ... (https://thetradable.com/crypto/eth-news-could-trigger-465b-short-squeeze-if-ath-is-retested-ig--a) [2] Ethereum (ETH) Bull Run Heats Up as $6B Shorts Face ... (https://cryptopotato.com/ethereum-eth-bull-run-heats-up-as-6b-shorts-face-liquidation/) [3] Ethereum's Next Move Might Shock Traders (https://captainaltcoin.com/ethereums-next-move-might-shock-traders/)