Massive shorts above price on top of buyer activity and bullish sentiment increased the chances of a short squeeze.
Only if the current momentum persists, breaking all resistances below the mark, can Ethereum reach $4,500.
Ethereum[ETH] surged by only 5% in the recent market bounce after liquidating shorts that came in at the bottom. The market was showing signs of a reversal, with massive shorts at risk of liquidation.
The addition of buy orders from whales and institutions on top of shifting sentiment all set the altcoin up for a run toward $4,500.
As of press time, Ethereum price liquidated late short orders that came in below the $3,600 mark after dropping to $3,200.
Massive shorts were building above the $3,600 zone, while those of latecomers were disappearing. Over $10 billion in Ethereum liquidity was stacked between $3,600 and $4,500, just above the current prices.
Based on current market patterns, Ethereum’s price may be approaching a key breakout zone.
If buy orders push past the $3,600 level, it could trigger a rapid short squeeze, potentially driving the price beyond $4,500.
Because liquidity is tightly clustered near these levels, short sellers may not have time to react.
Whales and institutions were capitalizing on the dip as they were accumulating between $3,000 and $3,400. For instance, a Bitcoin insider whale who had shorted BTC just before the tariff crash took a long position on Ethereum.
The whale placed a 5x leverage long on Ethereum, with the position amounting to 40,000 ETH valued at $138 million.
His closure of the BTC long position was a hint that ETH could rise faster than Bitcoin in the current conditions.
That was not the only buy on ETH. BlackRock also bought $35 million worth of Ethereum, as per CryptoGoos. This further supported a potential comeback for ETH price amid shifting market sentiment.
Speaking of market sentiment, the crowd and smart money were all bullish on Ethereum. In fact, the informed money was more convinced than the retailers, as the sentiment gauge read 0.23 against 0.21.
This was reflected across the entire crypto market, which rose by 1.35%, at press time.
All these observations pointed to a looming short squeeze that could take the price past $4,500. However, the charts indicated that for this price to be hit, short-term levels at $3,460, $3,900, and $4,200 had to be cleared.
Therefore, breaking these zones could push the price past $4,500, as all factors were aligning for such an undertaking.
