Ethereum has climbed to the $2,800 mark, a level that was previously identified as a target, supported by a combination of technical strength, renewed institutional interest, and a notable short squeeze. The cryptocurrency's price has risen nearly 2% in the last 24 hours, reinforcing the view that the bearish phase that took it to around $1,550 may be over.
Since that low, Ethereum has recovered sharply and broken out of a bullish continuation pattern, setting the stage for the next major upside objective near $3,400. While the macroeconomic backdrop remains challenging, several indicators suggest that buyers are regaining control.
Surge in Trading Activity and Short Liquidations
Ethereum's trading volume has spiked to approximately $20 billion during this rally, representing nearly 6% of its circulating market capitalization. This surge indicates stronger participation from traders and coincides with a broader cryptocurrency rally that forced bearish traders to unwind leveraged positions.
Total crypto short liquidations reportedly reached $924 million on Monday, the highest level since August, as several major digital assets broke through key resistance zones. Ethereum accounted for roughly one-fifth of those liquidations. When short sellers are forced to buy back the asset to cover their positions, it can add momentum to the rally, potentially accelerating ETH's move toward $2,800.
However, liquidation-driven rallies can be volatile. Sustained spot demand and continued capital inflows will be necessary to maintain momentum once the immediate short squeeze subsides.
ETF Inflows and On-Chain Signals
US spot Ethereum ETFs started the week on a stronger footing, recording approximately $270 million on Monday and $162.31 million on Tuesday. This renewed demand coincided with ETH's double-digit price increase and its breakout from a bullish flag pattern.
Despite the positive daily readings, the monthly trend remains modest. Ethereum ETFs have attracted $620 million so far in September. At that pace, the funds would finish the month with approximately $750 million in net inflows, a decline of about 50% from August's total. However, this projection is based on a simple run rate and could change if Ethereum continues to rise and attract additional institutional demand.
On-chain data also appears supportive. Santiment's 365-day Market Value to Realized Value (MVRV) ratio has risen to 3.6%, moving above zero for the first time since October 2025. A positive MVRV indicates that the average holder is sitting on unrealized profits. Historically, the previous four occasions when this indicator crossed above zero following a prolonged bear market were followed by advances toward approximately $4,000. While past performance does not guarantee future results, this crossover adds another constructive signal.
Can Ethereum Reach $3,400?
Ethereum has broken above a bullish flag pattern that formed after its strong August rally. A flag is typically a continuation formation, representing a temporary consolidation before the prevailing trend resumes. Using the height of the pattern's flagpole to project the potential move yields an upside target of approximately $3,400, which would represent a gain of roughly 21.4% from the $2,800 region.
The $2,800 area remains the key level to watch. A decisive daily close above it, followed by a successful retest as support, would strengthen the breakout and could open a path toward $3,000 and eventually $3,400. Momentum indicators currently favor buyers, with the Relative Strength Index crossing above its signal line and reaching approximately 69, just below the overbought threshold of 70.
That reading confirms strong bullish momentum, but it also suggests the rally may be becoming stretched. Failure to hold above $2,800 could trigger profit-taking and a short-term pullback before another advance attempt.
For now, the combination of stronger volume, positive ETF flows, improving on-chain data, and a technical breakout keeps the broader outlook bullish.
This article is for informational purposes only and does not constitute financial advice.
