Ethereum rises 18% as more than $1 billion in shorts are liquidated

Ethereum climbed 17.7% over the past 24 hours to $2,249.80, as more than $1 billion in $ETH short positions were liquidated amid falling US Treasury yields and new regulatory developments that drew traders back into crypto.

CoinGecko data showed $ETH rising from below $1,950 on Aug. 19 to an intraday high near $2,300 before easing to around $2,250 on Aug. 20. The move left the token up 19.3% over the previous seven days.

The rally came after the US Treasury said on Aug. 19 that it would at least double the size of liquidity-support buybacks for longer-dated government debt. The maximum purchase size for 10-to-20-year and 20-to-30-year nominal coupon securities will rise from $2 billion to at least $4 billion per operation between Sept. 9 and Nov. 4. The Treasury resumed regular buybacks in 2024, its first such program in more than two decades, with the liquidity-support operations aimed at improving trading conditions in older, off-the-run securities.

Reuters reported that long-dated US government bond yields fell by as much as 10 basis points after the announcement, while cryptocurrencies and gold moved higher. Before the intervention, the 30-year Treasury yield had climbed to nearly 5.34%, its highest level in almost two decades.

Lower long-term yields eased some of the pressure on risk assets, while the Treasury's move also added liquidity support to the government bond market.

$ETH's advance accelerated as leveraged traders betting on further losses were forced to close positions. CoinGlass data showed $1.13 billion in $ETH liquidations over the past 24 hours, including $1.02 billion from short positions. Long liquidations totaled $104.16 million over the same period. Liquidations occur when exchanges forcibly close leveraged positions that no longer meet margin requirements, and closing a short requires buying the asset back.

Over the past 12 hours, another $560.52 million in shorts were liquidated compared with $56.27 million in longs, underscoring how concentrated the derivatives unwind was among bearish positions. As $ETH moved through $2,000 and then $2,100, forced buying from short liquidations added to the upward pressure already in the market.

Regulatory developments in Washington also began building before the breakout. On Aug. 18, the US Securities and Exchange Commission proposed Regulation Crypto Assets, introducing a specific offering framework for certain investment contracts involving crypto assets.

SEC Commissioner Mark Uyeda said the proposal includes a startup exemption covering up to $5 million over four years and a separate fundraising exemption allowing as much as $75 million over a 12-month period. The proposal also includes a conditional safe harbour under which a crypto asset would be deemed not to be subject to an investment contract for securities-law purposes if the required conditions are met.

One day later, US President Donald Trump hosted crypto and financial industry executives at the White House and urged Congress to pass a version of the Digital Asset Market Clarity Act. The House passed the market-structure bill with bipartisan support in July, and it would divide digital-asset oversight between the SEC and the CFTC. Executives from companies including Coinbase, Robinhood and Kraken attended alongside federal regulators, while CoinDesk reported that the meeting came before a Commodity Futures Trading Commission Innovation Advisory Committee session.

Institutional flows had also turned positive before $ETH moved higher. SoSoValue data showed that US spot Ethereum exchange-traded funds recorded $71.47 million in net inflows on Aug. 18, led by BlackRock's ETHA with $64.68 million, or roughly 90% of the daily total. US spot Ethereum ETFs have traded since launching in July 2024, and ETHA is the largest fund in the category by assets.

$ETH price analysis

The daily Binance $ETH / $USDT chart shows $ETH breaking sharply above its Keltner Channel, a volatility envelope plotted around a moving average, after spending much of August between roughly $1,850 and $1,950.

The channel's upper boundary currently sits at $2,109.87, while the middle and lower bands are at $1,954.43 and $1,798.99, respectively. With $ETH trading near $2,245, the token is well above the upper band, confirming strong breakout momentum while also indicating that the daily move is stretched relative to recent volatility.

Volume has supported the move so far. $ETH's On Balance Volume reading rose sharply to 32.48 million as the token cleared $2,000, showing that the price jump was accompanied by stronger net buying volume rather than occurring with weakening participation.

The Supertrend, a trend-following indicator, has also turned bullish, with the indicator flipping below price and now sitting at $2,014.74. That makes the $2,000 to $2,015 area an important level to watch for maintaining the daily bullish structure.

At the same time, $ETH is trading almost directly on its session VWAP at $2,247.24 after reaching a daily high of $2,274.25. Trading near VWAP after the initial spike suggests buyers and sellers are now transacting close to the session's volume-weighted average rather than seeing an immediate pullback toward the breakout zone.

CoinGlass's 24-hour Binance $ETH / $USDT liquidation heatmap shows the nearest significant liquidity pools above price between roughly $2,275 and $2,300. Additional liquidation concentrations appear from about $2,320 to $2,350.

A sustained move through $2,300 could open the way toward the $2,320 to $2,350 zone. Above that, another resistance area sits near $2,400 to $2,450, where $ETH faced repeated selling pressure during April and May.

On the downside, liquidity remains concentrated near $2,200, making it the first level to watch if $ETH loses VWAP. Stronger technical support sits near $2,110 and $2,015, while a break below the Supertrend level could bring the Keltner midline near $1,954 back into focus.