Ethereum Eyes $3K After $1.8B in Shorts Liquidated at 15-week High

Ethereum’s Open Interest Soars to All-Time High Ethereum’s futures open interest (OI) has surpassed $40 billion for the first time ever, signaling record-high leverage and heightened market speculation. Open interest refers to the total number of active contracts that haven’t been settled or closed. Therefore, a high open interest suggests that more investors are either speculating on Ethereum’s future price or hedging their spot holdings to manage risk. An all-time high (ATH) in OI often precedes significant price movement, as a build-up of leveraged positions can lead to short squeezes or long squeezes, depending on trader bias. It can also lead to liquidations, which amplify price swings. CoinGlass data reveals $2B in long positions set for liquidation at $2,600 and $1.8B in shorts at $2,900, creating a high-stakes tug-of-war. With liquidity clustered at both ends, market makers face a pivotal decision on which side to target next. Therefore, caution should not be thrown to the wind because Ethereum’s price can go either way. At the time of this writing, ETH was experiencing a pullback to trade at $2,770 per CoinGecko data . Ethereum is Attracting More Institutional Interest Than Bitcoin Ethereum exchange-traded funds (ETFs) have drawn over $800 million in the past two weeks, which is more than double Bitcoin’s inflows of around $400 million, according to SoSoValue data. This can be linked to the fact that there’s growing speculation that ETH ETFs will soon incorporate staking—allowing investors to earn yield on ETH holdings without handling the technical side themselves. As a result, this staking optionality is drawing fresh capital into Ethereum compared to Bitcoin ETFs, which lack similar yield features. Jeff Mei, the COO at crypto exchange BTSE, opined, “Investors are finally recognizing the compelling investment opportunity that Ethereum presents. It’s still trading well below its all-time highs, while Bitcoin is already near its ATH levels.” He added that there is a high probability that Ethereum will reach or surpass its ATH by year’s end. ETH’s historic high price currently sits at $4,878 recorded in November 2021. Ethereum exchange supply hitting a 7-year low also paints a bullish picture, thanks to the intensified hodling taking place. DeFi’s Resurgence Propels Ethereum to New Heights as TVL Surpasses $65 Billion and Institutional Demand Surges Ethereum’s momentum in mid‑2025 is being turbocharged by a resurgence in DeFi activity, fueled by record demand, infrastructure upgrades, and institutional inflows. Ethereum now commands roughly $65.45 billion of DeFi’s global total value locked (TVL), according to DeFiLlama data. Innovations Lowering Friction Upgrades like Spectra, EIP‑4844 blobs, and the forthcoming Pectra upgrade are reducing fees and boosting scalability, enabling smoother DeFi operations. Additionally, emerging ZK‑rollup solutions are proving capable of processing more than 70 swaps per second—a dramatic improvement over Ethereum’s base rate of ~12 TPS. These developments enhance composability and user experience in borrowing, staking, and trading. Diversified Protocol Strength Ethereum’s DeFi suite has broadened in functionality: Lido leads liquid staking, helping depositors earn staking yields while keeping assets liquid for DeFi use. Aave dominates lending markets with its GHO stablecoin and cross‑chain lending pools. EigenLayer and EtherFi enable restaking, allowing users to earn extra yield while bolstering network security. Sky (MakerDAO’s evolution) now offers high‑yield stablecoins and vaults, growing TVL over 55% in recent months. Institutional Capital & Macro Tailwinds Ethereum’s deep liquidity and strong developer ecosystem are drawing institutional interest. Whales are shifting assets into self‑custody and DeFi vs. exchanges, increasing on‑chain demand . Broader macro trends—potential interest‑rate cuts and stablecoin growth—boost DeFi yield attractiveness compared to traditional fixed income. Network Effects Amidst Competition Ethereum remains the dominant platform, hosting over half of the global DeFi TVL. Although competitive ecosystems are growing (Solana up 800% Y/Y, newer chains like Aptos gaining traction), none match Ethereum’s composability, developer momentum, or market share. Conclusion Ethereum’s DeFi renaissance—rooted in record TVL, cross‑protocol innovation, on‑chain capital flow, and protocol upgrades—has created a positive feedback loop. As TVL rises, more builders are incentivized to innovate, attracting users and assets, reinforcing Ethereum’s network effects. Nevertheless, it remains to be seen how Ethereum plays out in the short term because liquidity is clustered in both bullish and bearish sides, with the psychological price of $3,000 expected to be a turning point.

Source: Coinpaper