As the Ethereum price approaches Q3, it has shown a notable 3% increase, surpassing the crucial $2,500 mark before stabilizing at $2,470.

This upside coincides with an optimistic upgrade to Ethereum’s validator architecture. This is aimed at enhancing both security and decentralization, and to address ETH-staking problems by an “active-active” architecture. 

A key player in this transformation is Obol Labs, the upgrade would allow Ethereum validators to function across multiple operators and machines.

That said, in the short term, as bullish sentiment grows, many analysts are making optimistic predictions for ETH more than ever. Notably, one of the prominent crypto analysts, Crypto Patel, recently suggested a breakout could propel Ethereum above $6,000.

However, amidst this renewed optimism, some whales are offloading their ETH on exchanges like HTX, ByBit, and OKX. Additionally, bears are increasing their positions against ETH, reaching all-time highs on the CME. 

This current landscape presents a potential opportunity for a short squeeze, especially if these short positions face significant liquidation.

Why A Short Squeeze Could Pump Ethereum Price To $5K

According to Lookonchain data, a significant whale has been offloading ETH recently. Wallets 0x14e4 and 0x26Bb, likely belonging to the same entity, have unstaked and withdrawn a staggering 95,920 ETH, valued at approximately $237 million.

In the past 20 days, this whale has deposited 62,289 ETH (around $154 million) into exchanges like HTX, Bybit, and OKX, while still holding onto 33,631 ETH, worth about $83 million. This activity clearly indicates that bear do not want ETH price to pump.

However, amidst this bearish trend, the sentiment has shifted from pessimism to opportunistic. As an analyst has pointed out a potential short-squeeze situation, suggesting that the current market dynamics could favor a price rebound. 

He noted that Ethereum shorts on the CME have reached an all-time high, with bears attempting to halt ETH’s upward momentum. It seems that the pressure on Ethereum is being artificially intensified. 

Yet, the recent positive price action suggests that the market may be ready to turn the tables on these short positions.

The expert further mentioned that despite the bears stacking their positions to counter the ETH bullish wave, it is becoming increasingly clear that the Ethereum price could liquidate these shorts and reach $5,000 by 2025. 

The Longer It Coils, the Longer The ETH Price WIll Breakout

The daily chart reveals that Ethereum’s price is hovering at a crucial juncture, near key EMA bands, including the 200-day, 50-day, and 20-day EMAs. 

While the price action on the daily chart clearly indicates two months characterized by range-bound movement.

However, the longer this consolidation persists, the greater the potential of a significant breakout to come in ETH crypto. While technical metrics remain neutral, the MACD has recently turned bullish, forming a golden cross. 

As a result, the chances are much higher that the price surge seen in Q2 will continue, supported by a continuation pattern in play.