Ethereum (ETH) witnessed a dramatic $500 million short liquidation on June 16, 2025, sparking renewed bullish hopes. Despite volatile macroeconomic conditions and mounting geopolitical tensions, particularly the Israel-Iran conflict, Ethereum managed to trade resiliently above the $2,400 mark. This short squeeze, combined with shifting on-chain signals, suggests the potential for a significant breakout if key resistance levels are cleared.
Short Squeeze Resets Futures Market
According to data from CryptoQuant, the massive liquidation of leveraged short positions has triggered a meaningful reset in the Ethereum futures market. The estimated leverage ratio, a metric used to gauge overleveraged positions, declined sharply post-liquidation—an indication that ETH might now be primed for a healthier rally.
Meanwhile, ETH inflows to derivatives exchanges hinted at traders initially preparing for downside volatility. However, with the market absorbing the shock and ETH maintaining crucial price support, the tone appears to be shifting.
Breakout Signal: Weekly 50-Period Moving Average
As noted by CryptoQuant Insights contributor İbrahim Cosar, a critical technical resistance lies at the 50-week Moving Average. Historically, Ethereum’s strongest rallies in October 2023 and November 2024 came after breaching this level.
Currently, ETH remains coiled just below this resistance. A weekly candle close above the 50-week MA could confirm a bullish breakout and set the stage for another sustained uptrend.
Seller Exhaustion Suggests Low-Risk Bottom
One promising sign is the drop in Ethereum’s Seller Exhaustion Constant, which now mirrors the lows of January 2024. This indicator combines the percentage of supply in profit with 30-day price volatility. A low score implies that many investors are sitting on unrealized losses while volatility is muted—a classic environment for bottom formation and potential accumulation.
ETH Still Underperforming BTC
However, not all signals are bullish. The ETH/BTC Spent Output Profit Ratio (SOPR) remains below 1, suggesting that ETH holders are realizing fewer profits (or more losses) compared to BTC investors. This ongoing underperformance relative to Bitcoin hints at continued skepticism in ETH’s price leadership.
The ETH/BTC pair saw a brief uptick in April, but since then, its profitability has lagged. For Ethereum to regain investor favor, a reversal in SOPR would likely need to accompany a breakout in ETH/USD price action.
Ethereum Market Snapshot
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Price: $2,420
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Market Sentiment: Cautiously Bullish
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Key Resistance: Weekly 50-period MA (~$2,520)
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Key Support: $2,300
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Leverage Data: Estimated leverage ratio down sharply post-liquidation
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SOPR (ETH/BTC): Still below 1, indicating ETH underperformance
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions.
