Ethereum Price Targets $4K as Historic Short Squeeze Unfolds

Ethereum Gears Up for a Record-Breaking Short Squeeze

Ethereum (ETH) is on the verge of a historic price surge as analysts predict a massive short squeeze could push the price toward the $4,000 mark in the coming days. Trading resource The Kobeissi Letter recently highlighted that Ethereum is currently experiencing one of the largest short squeezes in crypto history, with over $150 billion in market capitalization added since July 1.

ETH/USD 3-hour chart. Source: The Kobeissi Letter/X

“Ethereum is making history: We are currently witnessing one of the largest short squeezes in crypto history,” the Kobeissi team noted in an X (formerly Twitter) post.

At the time of writing, ETHis trading at $3,561, up 20% over the past week according to Cointelegraph Markets Pro and TradingView data. Local highs of $3,610 on Bitstamp are approaching the year-to-date peak seen earlier this year. From its 2025 low, ETH has now rallied more than 150%.

ETH/USD 3-day chart. Source: TradingView

$1 Billion in Shorts at Risk of Liquidation

The Kobeissi Letter suggests that another 10% price increase could liquidate $1 billion worth of leveraged short positions, further accelerating Ethereum’s upward momentum.

“If Ethereum rises another 10%, another $1 billion of shorts will be liquidated. Many of these shorts are heavily leveraged, which is adding more fuel to the fire. Ethereum could see $4,000 soon,” the report added, citing data from CoinGlass.

ETH exchange liquidation heatmap as of July 18. Source: The Kobeissi Letter/X

This surge is partly due to traders rotating capital from Bitcoin (BTC) into altcoins as they chase faster returns during this market cycle.

Bitcoin Dominance Hits Multi-Month Lows

While Ethereum surges, Bitcoin (BTC) remains in consolidation, trading below the $120,000 mark. Bitcoin’s market dominance has dropped to 61.4%, its lowest level since March, signaling a strong altcoin season in progress.

Popular trader Daan Crypto Trades commented:

Bitcoin crypto market cap dominance 1-day chart. Source: Daan Crypto Trades/X

“BTC dominance has only dropped 4.5% from local highs, yet the impact on altcoins and ALT/BTC pairs is already significant. When the market overheats, capital often cycles back into BTC or stablecoins.”

ETH Price Outlook for July 2025

With altcoin momentum rising and billions in short positions at risk, Ethereum’s move toward $4,000 appears increasingly likely. Analysts warn, however, that a sharp correction could occur if traders begin taking profits, especially if Bitcoin’s consolidation persists.

Related Bitcoin Price Poised for Consolidation, But a July ATH Still Possible