TL;DR
- Ethereum tracks rising global liquidity, with analysts warning a breakout could send ETH toward $7,000.
- Over $6 billion in shorts risk liquidation at $4,900, raising chances of a sharp squeeze.
- BitMine treasury and ETF inflows boost demand, with $2.8B entering spot ETH funds in August.
Liquidity and Macro Drivers
Ethereum is holding firm above $4,550 as macro conditions improve and liquidity expands. Analyst Merlijn The Trader noted that Ethereum is tracking global M2 liquidity, showing a close relationship between monetary supply and price action.
“The $ETH accumulation phase is history. Bull run phase is active,” he said.
His chart showed Ethereum rising in step with liquidity levels since mid-2025. He warned,
“Ignore this signal, and you’ll be buying ETH at $7K instead of $4.4K.”
ETHEREUM IS TRACKING GLOBAL LIQUIDITY
The $ETH Accumulation phase is history.
Bull run phase is active.Liquidity curls higher and Ethereum follows.
This is not “hopium.” This is macro.Ignore this signal, and you’ll be buying ETH at $7K instead of $4.4K. pic.twitter.com/5u9qnJgPjo
— Merlijn The Trader (@MerlijnTrader) August 26, 2025
Leverage is another factor to watch. Analyst Rekt Fencer said more than $6 billion in Ethereum short positions could be forced to close if the price reaches $4,900. “Massive short squeeze is coming soon,” they wrote.
Forced liquidations occur when markets move against traders holding leveraged short bets. Covering those positions can accelerate buying pressure, especially near major resistance zones. Ethereum has risen 4% in the past day and almost 9% weekly, bringing such levels within reach.
Market Structure and Technical Levels
Analyst Daan Crypto Trades highlighted that Ethereum briefly cleared its all-time high before retracing. He pointed to inefficiencies left by the “Powell candle” and said the four-hour trend remains strong, with ETH doubling since July without retesting lower ranges.
“The 4H 200MA/EMA is catching up quickly and corresponds with the range low of this area,” he explained.
He added that a sustained move above $5,000 would likely confirm a new phase of price discovery, while the structure remains bullish unless Ethereum drops below $4,000. In a later update, he stressed that $4,900 is the key resistance and $4,000–$4,100 is the main support area.
$ETH Has been holding on to its diagonal support as it has been chopping around in this price region.
All in all, the main levels to watch are the 2021 all time high level around $4.9K and the local support at around $4K-$4.1K.
Anything in between will likely just be a very… pic.twitter.com/c7MS8wuLir
— Daan Crypto Trades (@DaanCrypto) August 27, 2025
Institutional Buying and ETF Flows
Institutional demand is adding to momentum. As CryptoPotato reported, BitMine has accumulated 1.7 million ETH worth $7.9 billion in just over two months. That represents 1.4% of the total Ethereum supply and surpasses the pace of Bitcoin accumulation by corporate treasuries.
Spot Ethereum ETFs in the United States are also drawing strong inflows. More than $2.8 billion entered ETH spot funds in August, with inflows picking up pace again this week. Trading volumes for Ether treasuries last week overtook those for Bitcoin treasuries, showing renewed institutional focus on Ethereum.
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