Ethereum News Today: Ethereum Surges 7% to $4,200 on Gamma Squeeze and Altcoin Rally

Ethereum’s price surged over 7% on August 9, 2025, reaching $4,200, marking its highest level since December 2021 and its largest one-day gain in months. The rally has triggered a gamma squeeze in the options market, amplifying upward momentum through short liquidations and forced buying. With $207 million in short positions liquidated, the price breakout above $4,000 has drawn renewed capital flows toward Ethereum from Bitcoin, as reflected in the ETH/BTC ratio hitting annual highs [1].

The surge has also energized the broader altcoin market, particularly for Layer 2 solutions. Optimism (OP) and Polygon (MATIC) have seen significant price action, riding the coattails of Ethereum’s bullish trend. Optimism (OP) climbed nearly 11% in 24 hours to $0.80, fueled by the launch of Season 8, which enhances the Superchain’s security and scalability. Technical indicators like the MACD crossover and strong moving average alignment suggest potential for further gains toward $0.87, though immediate resistance remains near current levels [1].

Polygon (MATIC) has reclaimed $0.2560, holding key support between $0.2400 and $0.2450. Analysts highlight that a breakout above $0.2700 could pave the way for a move toward $0.3000, with Ethereum’s rally acting as a tailwind. If the positive sentiment continues, MATIC may even test the $0.35 level. Collectively, the performance of OP and MATIC reflects a broader shift in investor interest toward established Layer 2 ecosystems [1].

As Ethereum gains momentum, emerging projects are also catching investor attention. MAGACOIN FINANCE has drawn early comparisons to past breakout tokens, combining meme coin appeal with audited security and a capped supply of 170 billion. The project’s community-driven model mirrors the growth trajectories of tokens like PEPE and SHIB. With a rising holder base and rumors of listing on top-tier exchanges, MAGACOIN FINANCE is positioning itself as a potential breakout candidate in a market eager for new narratives [1].

Ethereum’s rally has not only rekindled risk appetite but also highlighted the interconnectedness of the crypto market. If the current trend persists, altcoins may see a stronger follow-through rally into the fourth quarter. Analysts suggest that dealers’ hedging activities could push ETH toward $4,400, but traders remain cautious about support levels near $3,500–$3,600. The next move, however, will depend heavily on macroeconomic conditions and market sentiment [1].

Source: [1] Ethereum Gamma Squeeze Fuels OP and MATIC as Price Eyes $4.4K Next Stop (https://coinmarketcap.com/community/articles/689aa4c81f3a5b4dc5e17fcd/)