The crypto market is nervous – But Ethereum sees this as an opportunity

• Ethereum saw $1.4B in net inflows as Trump’s ceasefire boosted crypto market sentiment.
• Short liquidation levels above $2,900 and rebounding indicators hint at a bullish breakout.

Ethereum [ETH] is riding a fresh wave of momentum as the crypto market rallied in response to President Trump’s ceasefire announcement.

The breakthrough has injected optimism across risk assets, and crypto is no exception.

ETH saw over $1.4 billion in net inflows last week alone, showing confidence from both institutional giants and retail investors.

With usage metrics climbing and shorts aggressively stacking up, Ethereum’s price action is coiling for a potential short squeeze; especially as key liquidation levels sit just above $2,900.

Ironically, growing trader fear may mark a local bottom, making way for a bullish breakout.

Ethereum leads net inflows

Despite market turbulence, Ethereum saw a staggering $1.4 billion in net inflows over the past week; far outpacing every other chain, as shown in Artemis’ latest data.

This comes as many other Layer 1s and alt-Layer 2s witnessed outflows.

Usage continues to climb even as volatility shakes broader sentiment, suggesting that both institutional and retail participants view current levels as a strategic entry point.

This inflow momentum, paired with macro optimism, strengthens the case for Ethereum to lead the next leg of the crypto market recovery.

Short squeeze on the horizon

Ethereum’s price action is coiling near a critical juncture, with a dense cluster of short liquidation levels stacked above $2,900. As traders pile into aggressive short positions, the potential for a sharp squeeze grows.

The accumulated liquidation data also shows a significant imbalance favoring short exposure, amplifying the risk of a cascading rally if ETH pushes higher.

Despite prevailing fear across the market, this sentiment historically signals a local bottom is near. If history repeats, the current environment may be the perfect setup for a swift bullish reversal.

Indicators hint at a rebound, but caution persists

Ethereum’s daily chart showed signs of a potential shift in momentum at press time. The RSI has bounced from oversold territory, currently hovering near 45, suggesting that selling pressure may be fading.

Meanwhile, the MACD showed a narrowing gap between the signal and MACD lines, hinting at a possible bullish crossover if momentum sustains.

Volume spikes on recent green candles point to renewed interest, although ETH continues to hover near the $2,400 range.

While not a confirmed reversal, these technical cues imply that Ethereum could be bottoming out, setting the stage for a potential upward breakout if sentiment improves.