Ethereum countdown at 3000 USD, with 4 billion in open contracts, 1.8 billion short positions are lining up to get liquidated.

Technical factors and macro variables intertwine, and the market faces a critical node for breakthrough or pullback.

Written by: White55, Mars Finance

Prologue: Price Breakthrough and Whale Maneuvering

On June 10, 2025, the price of Ethereum surged sharply, breaking through $2,827 and reaching a new high in 15 weeks. Behind this figure, a liquidation storm involving $1.8 billion in short positions is brewing. In this seemingly coincidental market movement, the operational trajectory of a mysterious whale has become a key annotation for interpreting market sentiment.

ETH whale trading activities. Source: Lookonchain/X

According to the on-chain tracking platform Lookonchain, an anonymous address has completed two precise strikes within 44 days:

• First round (April 27): Accumulated 30,000 ETH at an average price of $1,830 through Wintermute OTC, costing $54.9 million;
• Round Two (May 27): Sold an equal amount of chips at a price of $2,621, making a profit of $23.73 million, with a return rate of up to 43%;
• Endgame Harvest (June 10): Sold 30,000 ETH through OTC again for $82.76 million, locking in a profit of $7.3 million, for a total gain of $31 million.

Such operations are by no means isolated cases. According to CoinGlass data, Ethereum futures open interest (OI) has first surpassed the $40 billion mark, and the market leverage ratio is approaching a critical point. The current liquidity map shows a delicate balance: there is a $2 billion long liquidation risk clustered around $2,600, while $1.8 billion of short liquidation ammunition lurks above $2,900. This standoff between longs and shorts resembles a replica of the CDO market in "The Big Short"—any breakout in either direction will trigger a chain reaction.

Chapter Two: Ecological Expansion and Value Gaps

Behind the price frenzy, the Ethereum ecosystem is undergoing structural changes.

Ethereum weekly address participation chart. Source: growthepie

According to growthepie data, the number of independent active addresses surged by 70% in the second quarter, reaching a peak of 16.4 million on June 10. Among them, the Base network accounted for 72.81% (11.29 million addresses) as the growth engine, far exceeding Ethereum's mainnet at 14.8% (2.23 million addresses). This model of "satellite chains feeding back to the mainnet" is completely different from the narrative logic of the DeFi Summer of the 2020s.

Despite Ethereum still dominating the DeFi market with a 61% share and a TVL of $66 billion, its core revenue model has raised concerns:

• Fee Collapse: The network fees in the past 30 days were only $43.3 million, a 90% drop compared to before the Cancun upgrade.
• Staking Yield Predicament: While Blob technology reduces Layer2 costs, the annualized yield for stakers continues to languish at 3.12%, far inferior to competitors like Solana.
• Regulatory shackles: The SEC's scrutiny of ETH staking has led to a continuous net outflow of $369 million from spot ETFs for 8 days, causing a fracture in institutional confidence.

This contradiction is manifested in the on-chain data from Glassnode: the proportion of "diamond hands" addresses holding ETH for more than 1 year plummeted from 63% to 55%, while the selling volume of short-term holders surged by 47%. When technical upgrades fail to translate into profits for holders, the prosperity of the ecosystem instead becomes a driver of value dilution.

Chapter 3: The Blood-Red Compass of the Derivatives Market

The futures market is turbulent, with ETH futures open interest (OI) historically breaking through 40 billion dollars for the first time, indicating a high market leverage. The significant increase in open interest suggests potential volatility.

Ethereum liquidation chart. Source: CoinGlass

CoinGlass liquidation heatmap reveals the brutal logic of capital games:

• Bullish Danger Zone: $2,600-$2,665 range accumulates $2 billion liquidation risk, which coincides with the 50% Fibonacci retracement level for the 2024 bull market;
• Short graveyard: $2,900 above 1.8 billion dollars in short positions hanging by a thread, corresponding to the historical low of ETH/BTC exchange rate at 0.019;
• Institutional Duality: CME Ethereum futures open interest accounts for 9%, contrasting with the 24% institutional dominance in Bitcoin futures, suggesting that traditional capital remains on the sidelines.

The distorted prosperity of the derivatives market is a manifestation of a liquidity trap. When the perpetual contract funding rate remains negative and the buy-sell ratio of those taking positions falls below 1, the market has entered an "extreme bearish" state. In such an environment, the OTC cashing out by whales resembles a exit signal before the doomsday carnival—after all, historical data shows that the probability of a black swan event occurring within 3 months after a record high in open interest is as high as 68%.

Chapter 4: Technical Passwords and Macroeconomic Variables

Looking at the K-line pattern, the current market hides mysteries:

• Volatility squeeze: The daily Bollinger Bands have narrowed to 5%, the lowest level since February 2024, indicating a potential breakout ahead;
• Weekly Paradox: Price holds above the 50-week and 100-week EMA, but the MACD histogram shows a bearish divergence, and an RSI value of 42 indicates insufficient upward momentum;
• Fibonacci Stalemate: A daily closing price of $2,800 will become the tipping point for bulls and bears. A breakout will open up a theoretical range of $3,200-$3,500, while a reversal may retest $2,500 for price support.

At the macro level, the geopolitical negotiations between the US and Russia, along with the Federal Reserve's interest rate cut expectations, create a dual disturbance. CME interest rate futures indicate that the market has priced in a 79% chance of 2-3 rate cuts in 2025; if the actual path deviates, the crypto market will be the first to suffer. Standard Chartered Bank warns that if the RWA (real-world assets) narrative fails to materialize in Q3, Ethereum may face a risk of a hundred billion dollar market cap evaporation.

Final Chapter: The Eve of the Paradigm Revolution

Ethereum is at a historical crossroads:

• Staking Economy Reconstruction: The staking limit for validation nodes is raised to 2048 ETH through EIP-7251, and the exit mechanism is optimized to alleviate liquidity crises;
• Layer2 Value Feedback: Forcing Layer2 such as Arbitrum to allocate a portion of their fee income to the mainnet, addressing the paradox of "ecological prosperity, mainnet anemia";
• Regulatory Breakthrough: If the SEC's ruling on the 21Shares staking ETF is passed in Q3, it is expected to bring a short-term increase of 15-20% and lock in 8% of the circulation.

As Peter Brandt said, after breaking the congestion pattern at $2,800, Ethereum may initiate a "moonshot" rally to $5,232. However, caution is warranted, as the essence of this capital game remains liquidity hunting driven by leverage—when $1.8 billion in short positions turns into fuel, the market will ultimately verify: who is steering the trend and who is the naked swimmer.