Ethereum price skyrockets to a 15-week high, with $1.8 billion short positions facing liquidation risk

On June 10, 2025, the price of Ethereum surged past $2,827, setting a new 15-week high. Behind this price movement lies a potential liquidation storm involving $1.8 billion in short positions. In this seemingly coincidental market situation, the trading patterns of a mysterious investor have become a key clue for interpreting market trends.

According to on-chain data, an anonymous address completed two precise operations within 44 days:

1. April 27: Purchased 30,000 ETH at an average price of $1,830, with a total investment of $54.9 million;
2. May 27: Sold an equivalent amount of ETH at a price of $2,621, profiting $23.73 million, with a return rate of 43%;
3. June 10: Sold 30,000 ETH through over-the-counter trading for $82.76 million, locking in a profit of $7.3 million, with total profits reaching $31 million.

This operation is not an isolated case. Data shows that Ethereum futures open interest (OI) has surpassed the $40 billion mark for the first time, and the market leverage ratio is approaching a critical point. The current market presents a delicate balance: around $2,600, there is a $2 billion liquidation risk for long positions, while above $2,900, there lurks an $1.8 billion risk of short positions being forced to close. This standoff between longs and shorts is reminiscent of the derivatives market during the financial crisis, where any breakout in either direction could trigger a chain reaction.

At the same time, the Ethereum ecosystem is undergoing structural changes. In the second quarter, the number of independent active addresses surged by 70%, peaking at 16.4 million on June 10. One Layer 2 network accounted for 72.81% (11.29 million addresses) of this growth, far exceeding the Ethereum mainnet's 14.8% (2.23 million addresses). This "satellite chain feeding back to the mainnet" model is completely different from the development logic of the DeFi Summer in the 2020s.

Despite Ethereum still holding 61% of the DeFi market with a TVL of $66 billion, its core revenue model has shown signs of concern:

• Significant decrease in transaction fees: The network transaction fees in the past 30 days were only $43.3 million, a 90% decrease compared to before the upgrade;
• Staking yields are sluggish: Stakers' annualized returns continue to hover around 3.12%, far lower than other competing public chains;
• Regulatory pressure: The scrutiny of ETH staking has led to a continuous net outflow of $369 million from spot ETFs over the past 8 days, challenging institutional confidence.

This contradiction is clearly visible in on-chain data: the proportion of addresses holding ETH long-term has dropped from 63% to 55%, while the selling volume of short-term holders has surged by 47%. When technological upgrades fail to effectively translate into profits for holders, ecological prosperity may instead become a driver of value dilution.

In the futures market, the open interest (OI) of ETH futures has first broken through $40 billion, indicating potential high volatility. The liquidation data reveals the intensity of capital gaming:

• Long position risk zone: $2,600-$2,665 range accumulates $2 billion in liquidation risk;
• Short positions danger zone: $2,900 and above, $1.8 billion in short positions face liquidation threat;
• Institutional attitude divergence: Institutions account for only 9% of the open contracts in ETH futures, in sharp contrast to the 24% institutional dominance in BTC futures.

From a technical perspective, the current market shows the following characteristics:

• Volatility contraction: The daily Bollinger Bands width has shrunk to 5%, the lowest since February 2024, suggesting a possible upcoming breakout;
• Weekly contradiction: Although the price has stabilized above the key moving averages, the momentum indicators are showing divergence, indicating insufficient upward momentum;
• Key price level: The daily closing price of $2,800 will become the dividing line between bull and bear; a breakthrough may open up an upward space of $3,200-$3,500, otherwise it may pull back to $2,500 to seek support.

In terms of the macro environment, geopolitical tensions and expectations regarding Federal Reserve policies constitute dual influencing factors. The market has high expectations for interest rate cuts in 2025, but if the actual path diverges, the crypto market may be among the first to be impacted.

Looking ahead, Ethereum is facing multiple challenges and opportunities:

• Staking economy optimization: Adjusting the staking limit for validator nodes through proposals, optimizing the exit mechanism to alleviate liquidity pressure;
• Layer2 Value Distribution: Consider requiring Layer2 to allocate a portion of the fee income to the mainnet to address the contradiction of "ecological prosperity and declining mainnet revenue";
• Regulatory breakthrough: If the staking ETF is approved in the third quarter, it may bring a short-term increase of 15-20% and lock in about 8% of the circulating supply.

Some analysts believe that if it breaks the key level of 2,800 dollars, Ethereum may start a new round of rise to 5,232 dollars. However, investors should be cautious, as the current market is essentially still a liquidity game driven by leverage. The fate of the 1.8 billion dollars short positions will become a key indicator to verify the true direction of the market.