Ethereum could see $1 billion in short liquidations if it surpasses $2,779... Will it reach $3,000?

▲ Ethereum (ETH) ©Godasol

As Ethereum (ETH) consolidates below the $2,800 resistance, an analysis suggests that a breakthrough above $2,779 could trigger $1 billion worth of short position liquidations. With approximately 30% of the total supply locked in staking and large institutional accumulation continuing, there's a forecast that ETH could rise to $3,000 if it breaks past $2,800.

According to the investment media outlet TradingNews on September 30 (local time), Ethereum traded at $2,686.32, maintaining its support zone between $2,650 and $2,710. The US August Core Personal Consumption Expenditures (PCE) price index rose 3.0% year-over-year, falling below the expected 3.3%, and increased 0.2% month-over-month, also lower than the expected 0.3%. Consequently, the probability of a Federal Reserve (Fed) interest rate hike in October decreased from 47% before the announcement to 37%. ETH recovered to the $2,686 level after the inflation data release but still failed to overcome the $2,750-$2,800 resistance zone, which had repeatedly capped its gains in September.

On the supply side, strong price-driving factors are emerging. As of September 27, Bitmine held 6,001,302 ETH, securing 4.9% of the total supply of 122.1 million ETH. Of this, 84%, or 5,067,309 ETH, is staked, and more than 30% of the total Ethereum supply, over 36 million ETH, is locked with validators and out of circulation. Bitmine aims to acquire approximately 6.1 million ETH, 5% of the total supply, meaning it has 103,700 ETH left to reach its goal. However, the possibility of a slowdown in buying speed after reaching the target has been identified as a future supply and demand variable.

Institutional fund flows are mixed. US Spot Ethereum ETFs recorded net inflows of $1.42 billion for nine consecutive trading days from August 17 to 28, but on September 29, $2.81 million flowed out, ending the seven-day consecutive inflow streak. On the same day, $8.94 million exited BlackRock's ETHA and $6.70 million from Fidelity's FETH. While the scale itself is not large, the timing coincided with ETH's failure to break the $2,750-$2,800 resistance, making the resumption of ETF buying a key variable for further upside.

In the derivatives market, $2,779 is the decisive point. Ethereum futures open interest is estimated at approximately $33.6 billion, and if ETH breaks above $2,779, accumulated short positions worth $1 billion on major centralized exchanges could face liquidation pressure. This price is only 3.5% higher than $2,686, and analysis suggests that forced buying due to short liquidations, if it triggers an additional short squeeze, could accelerate the ascent to $2,900 after breaking $2,800.

TradingNews presented $2,650 as the key defense line for an upward outlook. If ETH maintains this price and breaks $2,800 on a daily closing basis, $2,900 and the psychological resistance of $3,000 could become subsequent targets. These levels are approximately 8.0% and 11.7% higher than the current price, respectively. Conversely, if it falls below $2,650, there is a possibility of it dropping to $2,600 and then $2,500. Key variables that will determine the future direction include US employment figures, ETF fund flows, further accumulation by Bitmine, and the Ethereum-to-Bitcoin Ratio (ETH-to-BTC Ratio).

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*