- Ethereum surged 20% to $2,331 as $265 million in shorts were liquidated, marking its biggest one-day gain of the year.
- Analysts warn of a potential pullback with $2,232 as key support, while $2,550 remains the next major resistance.
- Despite the rally, ETH/BTC’s MVRV ratio suggests Ethereum is undervalued, but flat network activity and ETF outflows raise concerns.
Ethereum just pulled off its largest single-day gain of the year, skyrocketing 20% to $2,331. The surge comes as short traders get crushed — over $265 million in ETH shorts were liquidated, fueling a price spike that coincided with a 184% jump in futures volume and a 20% rise in open interest, per Coinglass.
Interestingly, the simultaneous rise in price and open interest suggests new long positions are piling in, not just short covering. Could be the start of a bigger trend, but for now, ETH remains down 26% year-to-date, despite climbing 54% in the last month as altcoins regain some shine.
Technical Outlook — Breaking Key Levels
Ethereum’s breakout above the $1,950 support level sent it ripping through a rising channel that had held it down since mid-April. Now at $2,331, the next resistance levels to watch are $2,386 and $2,550.
But momentum’s looking a bit overheated. MACD’s flashing overbought signals, suggesting a pullback could be on deck. If ETH slips, $2,232 is the key level to hold — the upper boundary of the breakout channel. Drop below that, and $2,101 could come into play as the next support.
Trade Setup:
- Buy Above: $2,232
- Take Profit: $2,550
- Stop Loss: $2,101
Is Ethereum Undervalued vs. Bitcoin?
Some analysts are now pushing the narrative that ETH is undervalued relative to Bitcoin. CryptoQuant flagged Ethereum’s ETH/BTC MVRV ratio between 0.4 and 0.8 — its lowest since 2019. Historically, this level has preceded big ETH rallies, like in 2017, 2019, and 2021.
But there’s a catch. Network activity is flat, ETH burns are slowing, and DeFi is plateauing. Meanwhile, Grayscale’s ETHE is bleeding capital, with billions in redemptions as institutional interest cools. If ETH is going to break out for real, it might need a fresh catalyst — maybe a DeFi surge or a staking boost.
