Ethereum News Today: Ethereum's Supply Constraints Fuel Record-Breaking Surge

Ethereum (ETH) has exceeded its previous all-time high, reaching $4,945.60 on August 24, 2025, according to CoinGecko data. This marks a significant milestone for the second-largest cryptocurrency by market capitalization, as it surpasses the record of $4,878 set in November 2021. The surge has been driven by a combination of institutional adoption, strategic investments from digital asset treasury companies, and growing enthusiasm for ether-based ETFs. Companies such as SharpLink Gaming (SBET), BitMine Immersion Technologies (BMNR), and EthZilla (ETHZ) have followed the lead of Michael Saylor’s MicroStrategy, which has aggressively accumulated Bitcoin since 2020, but have turned their attention to ether. This shift has contributed to heightened demand and reinforced Ethereum’s position as a key player in the digital asset ecosystem [1].

The breakout has been framed as a classic price discovery event, where the market lacks historical resistance levels to anchor sentiment. Traders and analysts note that Ethereum has moved beyond its previous consolidation phase, creating a scenario where demand is outpacing supply. James Butterfill, head of research at CoinShares, attributes this trend to Ethereum’s role in facilitating large stablecoin transactions, a function expected to expand following the anticipated passage of the GENIUS Act. Additionally, the blockchain’s economic model, which limits the issuance of new ether or even results in negative net issuance, helps maintain a constrained supply, further supporting price resilience amid rising demand [1].

However, the surge has not been without cautionary signals. Some analysts warn that the sharp weekend rally may experience a short-term pullback as liquidity normalizes. Michaël van de Poppe, a market commentator, highlighted the unusually large weekly candle, suggesting that breakouts over the weekend are often retraced early in the following week. This is attributed to thinner order books on weekends, which can exaggerate price movements before broader market participation returns on Monday. While a pullback could test the newly established support levels, it would not necessarily invalidate the overall bullish trend. In fact, such retests often confirm the strength of the breakout before the trend resumes [2].

Technical analysis further underscores the importance of key support levels in determining Ethereum’s near-term direction. On the daily chart, Ethereum has found initial support near $4,070, which coincides with the 0.5 Fibonacci retracement level and the midline of an ascending channel. If this level is breached, the next area of demand lies between $3,900 and $3,660, representing a potential accumulation zone for buyers. On the 4-hour timeframe, Ethereum appears to be consolidating between $4,200 and $4,400, with a critical support level at $4,200. A successful breakout above $4,400 could validate an inverted head and shoulders pattern, indicating a renewed push toward the all-time high. Conversely, a breakdown below this level could expose the price to deeper corrections [3].

On-chain data also reveals insights into Ethereum’s volatility. The liquidation heatmap highlights clusters of leveraged positions, with significant short liquidations occurring around the $4,500–$4,700 range and long liquidations concentrated in the $3,800–$3,900 zone. These zones often act as magnets for price due to liquidity imbalances, with buyers and sellers reacting to the presence of large positions. The recent sharp correction following the all-time high saw Ethereum fall to the $4,100–$4,200 range, tapping into a cluster of long liquidations and accelerating the sell-off. As Ethereum consolidates in the $4,200–$4,500 range, the market remains highly liquidity-driven, with volatility expected to persist until a clear directional breakout emerges [3].

Source: [1] Ether, the cryptocurrency that breaks 2021 all-time high (https://www.axios.com/2025/08/24/ether-all-time-high) [2] As ETH breaks above USD4,900 analyst sums up crypto market (https://www.coindesk.com/markets/2025/08/24/as-eth-breaks-above-usd4-900-analyst-sums-up-crypto-market-btc-is-exhausted-eth-isn-t) [3] ETH’s rally hinges on these crucial support levels (https://cryptopotato.com/eths-rally-hinges-on-these-crucial-support-levels-ethereum-price-analysis/)