Ethereum News Today: Ethereum Surges 16% to $3,500 on Short Liquidations and Spot ETF Inflows

Ethereum has recently surged past the $3,500 mark, reclaiming a significant psychological level and demonstrating strong buyer control. This rally has been driven by several key factors, including substantial short liquidations, strong spot ETF inflows, and increased on-chain activity.

Since July 14, Ethereum has seen a 16% increase in value, trading just above $3,500. The rally has been fueled by a combination of dwindling exchange reserves and rising open interest, indicating intense speculative activity. The exchange reserve outflows suggest that holders are moving their assets out of centralized exchanges to store them in cold wallets for the long term, a classic sign of accumulation.

The role of the derivatives market has also been significant in driving Ethereum's price higher. Short liquidations, particularly on Binance, have been a dominant force. Unlike earlier in the year when long liquidations were more prevalent, the current short liquidations suggest that some market participants were positioned against the trend. These liquidations have inadvertently fueled the rally, as short positions are closed out, driving the price higher.

There were multiple short squeezes since May, with over $20 million liquidated in a day. The size of these short liquidations could fuel the rally, alongside the spreading belief in Ethereum as a store of value.

The top 10 companies collectively hold 1.6 million ETH, worth $5 billion. SharpLink led the way with 280.6k ETH in its reserves. This significant holding by major companies is expected to create billions of dollars worth of demand, potentially spurring Ethereum to new all-time highs in the coming months.

The Estimated Leverage Ratio has also reached cycle highs, driven by the combination of dwindling exchange reserves and rising open interest. While this ratio appears irresponsibly high and could suggest a price retracement, the healthy spot demand indicates that the rally may continue.

In summary, Ethereum's recent surge past $3,500 has been driven by a combination of short liquidations, strong spot ETF inflows, increased on-chain activity, and significant holdings by major companies. These factors suggest that Ethereum's bullish momentum is likely to continue, with the potential for new all-time highs in the near future.