Ethereum Price Surge: $3500 Breakout Fueled by ETF Inflows & Short Squeeze

Ethereum Defies Market Gravity: $3500 Holds as Traders Eye Breakout Amid ETF Inflows and Short Squeeze

The $303 Million Liquidation Tsunami

As Bitcoin stumbled below $69,000 this week, Ethereum staged a stunning counter-rally that vaporized over $303 million in short positions within 24 hours. According to The Market Periodical, this massive liquidation event—primarily targeting leveraged bearish bets—propelled ETH toward the critical $3,500 psychological barrier. The surge marks Ethereum’s strongest weekly performance against Bitcoin since spot ETF trading began, with the ETH/BTC pair climbing 8.3% since June 1.

The ETF Catalyst Reshapes Demand

Institutional capital is flooding into Ethereum through newly launched spot ETFs, accumulating over 800,000 ETH ($2.8 billion) since trading commenced on May 23. Data from The Market Periodical reveals these products now hold 3.4% of Ethereum’s circulating supply, mirroring early Bitcoin ETF accumulation patterns that preceded historic rallies. Crucially, this institutional inflow offsets retail selling pressure observed on exchanges like Coinbase, where ETH reserves dropped to 4-year lows. As FX Empire notes, this supply crunch creates ideal conditions for price appreciation when demand surges.

Technical Symmetry Hints at Historic Breakout

Ethereum’s price action now converges at the apex of a multi-year symmetrical triangle, a technical pattern signaling explosive volatility. TradingView analysts highlight ETH’s consolidation above $3,500—a level that has flipped from resistance to support—with immediate resistance at $3,650. A decisive close above this threshold could trigger cascading buy orders toward $3,880, last seen in March 2024. Longer-term, TronWeekly observes this pattern resembles Ethereum’s 2017-2020 structure that preceded a 1,200% rally, suggesting potential for $12,000 ETH if historical cycles repeat.

The Bitcoin Decoupling Goes Mainstream

While Bitcoin dominance waned, Ethereum’s technical strength against BTC reached a pivotal moment. As Cointelegraph reports, ETH/BTC shattered a 5-month descending trendline on June 3—a development last seen before Ethereum’s 75% Q1 2023 outperformance. CryptoQuant data confirms this shift: derivatives traders now allocate 31% of altcoin portfolios to ETH options, the highest since 2022. "This isn’t just altseason—it’s Ethereum season," remarked Markus Thielen, head researcher at 10x Markets. "Institutional players view ETH as a tech bet, not just digital gold 2.0."

Regulatory Tailwinds and Network Metrics

The SEC’s unexpected approval of Ethereum ETFs on May 23 resolved a key regulatory overhang, validating ETH’s non-security status. On-chain activity reinforces bullish momentum:

• Gas fees surged 140% month-over-month as NFT and DeFi volumes rebound (Etherscan)

• Active addresses hit 617,000 daily, eclipsing Bitcoin’s 572,000 (Messari)

• Staking yields remain at 3.8% despite 27.4% of supply locked (Staking Rewards)

The $3,650 Litmus Test

Current price action hinges on Ethereum’s ability to breach the $3,650 resistance zone. Failure could see retracement to $3,420 support, though FX Empire notes the 50-day EMA at $3,500 provides robust reinforcement. Options markets reveal skewed expectations: Deribit data shows 78% of June-expiry contracts target $3,700+, while only 12% hedge below $3,400. With $303 million in shorts already liquidated, a breakout above $3,650 could ignite a gamma squeeze targeting $3,880 by month-end.

The Institutional Endgame

BlackRock’s ETH ETF has absorbed 298,000 ETH ($1.04 billion) since launch—the fastest-growing crypto ETF in history. This mirrors their Bitcoin ETF trajectory that saw $10 billion inflows in four months. "We’re witnessing the institutionalization of Ethereum," said Fidelity Digital Assets’ Chris Kuiper. "Portfolios that allocated 1-3% to crypto now split that between BTC and ETH." The real test comes in July when ETF issuers begin staking ETH, potentially creating a yield-driven demand loop.

Will Ethereum’s technical breakout confirm its status as the institutional altcoin of choice? Share your thoughts on our X.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.

Sources:

• TradingView: "Ethereum Price Aims Higher In Shadow Of Bitcoin’s Dip"

• Cointelegraph: "Ethereum Poised for Significant Breakout: ETH Price Strengthens Against BTC"

• TronWeekly: "Ethereum Price Prediction: Multi-Year Triangle Nears Apex as ETH Eyes $12K Breakout"

• FX Empire: "Ethereum Price News: ETH Consolidates After Hitting $2,800? Key Levels to Watch"

• The Market Periodical: "Ethereum Price Eyes $3500 Amid $303M Short Squeeze, ETF Inflows"