Wave of short liquidations drives ETH past $3,600 as analyst calls price shift a ‘regime change’

Ethereum continued its momentum heading into the weekend, leaping more than 20% this week to trade above $3,600 on Friday after a wave of short liquidations and bullish option bets pointed to a possible run at $4,000 by the July 25 expiry, according to onchain options venue Derive.xyz.

Dr. Sean Dawson, Derive’s head of research, said traders “are aggressively positioned for a rapid move to $4K” and called the spike “a regime change” for ether. About $136 million in ETH shorts were liquidated over 24 hours, Coinglass data shows, fueling a squeeze that pushed prices higher.

Roughly 25% of Derive’s ether volume since Wednesday has centered on $3,000–$4,000 call options expiring July 25, while 8% of all open interest on the platform for that date now sits at the $4,000 strike. Dawson put the probability of Ether finishing July above $4,000 at 14%, rising to 27% for above $5,000 by the end of 2025.

“BTC is participating, but this rally belongs to ETH. The technical setup, option flows, and liquidations all point to a meaningful structural shift in positioning,” he said.

Market elevated, but not yet euphoric

Regulatory tailwinds supported the uptrend. The total crypto market value reached $4 trillion for the first time as bipartisan support advanced the GENIUS Act to the president’s desk and sent the Clarity Act to the Senate, measures that investors view as paving the way for clearer U.S. crypto rules.

Wall Street’s appetite for crypto funds remained “extremely strong” following the news. Ethereum especially logged massive flows to reinforce its leadership in this leg of the rally, BRN’s lead research analyst, Valentin Fournier, told The Block. Spot Bitcoin ETFs pulled in approximately $523 million on Thursday, slightly less than $602 million in net inflows to their Ether counterparts, The Block’s data dashboard shows.

Fournier warned that early signs of an overheating market flashed, as new highs will likely encourage broad profit-taking. Selling pressure may trigger crypto volatility in the near term, especially for altcoins. However, the analyst expects institutional flows and legislative clarity to keep the broader up‑trend intact.

“Despite the sharp gains, the Fear & Greed Index sits at 71/100, suggesting investor sentiment is elevated but not yet euphoric,” Fournier said. “We remain overweight on altcoins, particularly Ethereum and Solana, given their outsized performance and institutional traction.”

Meanwhile, Bitcoin consolidated below $120,000 and hit the +1 Standard Deviation above the short-term holder cost basis, which has historically acted as resistance, Glassnode noted. Still, BTC’s sideways price action traded just shy of its all-time high, and data indicates that the next resistance level is higher, at around $136,000, leaving room for more upside.

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