Ethereum (ETH) surged nearly 40% last week, breaking past the $2,500 mark and igniting fresh bullish sentiment across the crypto market. This sharp rally comes as broader market confidence improves, with Ethereum trading at $2,584 after rising from a low of $1,812 between May 8 and May 10.
This three-day climb formed a “triple white soldier” pattern—a bullish technical signal reflecting consistent buyer dominance. It also completed a rounding bottom pattern, a common reversal formation that indicates sustained momentum.
Ethereum now trades well above its 200-day Exponential Moving Average (EMA), a key technical indicator that confirms a shift from bearish to bullish trend. The Relative Strength Index (RSI) is currently in overbought territory, reflecting strong buyer activity, but also suggesting the potential for short-term pullbacks.
Short Squeeze Risks as $786M in Shorts Loom
The rally has triggered a wave of short liquidations, shaking out bearish positions. According to Coinglass, nearly $786 million in short leverage is at risk of being liquidated if ETH pushes just 3% higher, toward $2,586.
This sets the stage for a potential short squeeze, where bearish traders are forced to buy back their positions at higher prices, accelerating gains.
However, downside risks remain:
- A 3% drop to $2,438 could result in $715 million in long liquidations, potentially reversing momentum.
- Support lies near the 200-day EMA and 50% Fibonacci retracement at $2,430.
- A breakdown could retest the 100-day EMA at $2,144.
Key price zones to monitor:
- Resistance: $2,586 (short squeeze threshold)
- Support: $2,430 (critical support zone)
- Breakdown risk: $2,144 (EMA test)
Nearly 67M ETH Nears Profitability
According to IntoTheBlock’s Global In/Out of the Money (GIOM) data, approximately 6.61 million investors hold 66.96 million ETH between $2,360 and $2,557. As ETH crosses $2,557, this entire tranche of supply would become profitable.
This threshold serves as both a psychological and technical support level. Once breached, it could provide further fuel for Ethereum’s rally, reinforcing the current uptrend and encouraging sidelined investors to re-enter the market.
If bullish momentum continues, Ethereum could:
- Reclaim the $3,000 psychological resistance.
- Extend toward the breakout target of $4,570, based on the depth of the rounding bottom pattern.
Conclusion:
With market momentum building and nearly 67 million ETH on the verge of profitability, Ethereum is positioned for a decisive move. Whether toward $3,000 or beyond, all eyes are now on the breakout zone at $2,557.
Would you like a technical chart visualizing ETH’s rounding bottom and key resistance levels?
