- Ethereum also recorded a new record of a daily transaction of 1.74M.
- Liquidations of less than $1.5B might accelerate the price to $5,000.
- The market share is above 12 percent, the highest in five years.
Ethereum ($ETH) has broken an important resistance level and is currently trading at approximately $4,207, causing a huge buzz in the market. There is a fresh burst of energy that indicates that the idea of $5,000 is not just a dream but a real goal on the horizon.
Source – X
Insights posted on X by @Bullify_X reveal that the price breakout of Ethereum has seen the skepticism turn into frenzy, with the momentum being termed as a run rather than a walk to this important milestone.
Why $5,000 Feels Closer Than Ever
Source – X
The number of daily Ethereum transactions on August 5 reached a record peak of 1.74 million, and July represented the highest monthly transaction volumes ever. This is an actual use of the network, rather than hypothetical trading circuits.
The domination of Ethereum in the crypto market has been increasing to over 12 percent, which has not been witnessed in five years, and which shows a change of focus on capital invested in ETH rather than other cryptocurrencies.
Source – X
Both value and assurance are becoming stronger and stronger as institutional inflows come in alongside active utilization. Market indicators reveal volumes going up and support lines being in a perfect correlation with the price as ETH is now trading over the level of 4,000 dollars, which makes it even more convincing that a new price rally will take place.
This pairing of organic demand and technical momentum creates a productive environment to drive prices up to the mark of $5,000.
The Short Squeeze Effect: Catalyst for Confidence
Source – X
Another driver is the impact of short liquidations. A rally to $5,000 on Ethereum might result in about $1.5 billion of short liquidation, and short sellers would be required to close out their positions by purchasing ETH.
Such a short squeeze impact is likely to improve confidence in the market, and new investors will join the market, putting pressure on an upwardly rising price.
Historical actions demonstrate that liquidation cascades have a dramatic effect on the price movement of ETH. When the price of ETH went up above $4,000 recently, short positions worth more than $24 million were liquidated.
Long positions are overwhelmingly long relative to shorts as open interest rises, an indicator that bullish sentiment is accumulating in derivatives markets.
Skeptics Still Cautious
With the positive indicators, however, the likelihood of reaching the $5,000 mark by the end of this cycle is less than 10 percent according to some data providers. This warning balances call and put options and reflects a neutral investor mood.
Additionally, big owners may sell into strength, and this poses resistance at points of profit breakeven. Nonetheless, strategic hoarding by institutional actors, such as spot Ether ETFs, could play the role of a shortage, and could aid in long-term price appreciation.
What the Market Is Watching Next
The nearest resistance area is in the range of 4,200 to 4,500. In case Ethereum sustains and advances above these levels, it may open the door to a quick run to $5,000. Market analysts are monitoring the level of transactions, dominance, and liquidation to help determine the changes in momentum.
This rally is the main point of focus among crypto investors around the world, as Ethereum has emerged as one of the leading contenders in the smart contract arena with increasing adoption.
