Key points:

  • Ether is currently forging a short squeeze that stands out in crypto history, says analysis.

  • A 10% price increase would see another $1 billion in liquidated shorts.

  • Shorts should now fuel a $4,000 ETH price rebound.

Ether (ETH) is “making history” as ETH price gains spark a short squeeze for the record books.

Fresh analysis from trading resource The Kobeissi Letter issued Friday now sees ETH/USD hitting $4,000 “soon.”

Ether shorts risk punishment as ETH eyes 2025 highs

Ether price strength has become one of July’s crypto market standouts as altcoins slowly begin following Bitcoin (BTC) higher.

As the largest altcoin by market cap, Ether is punishing short positions at a rate rarely seen before, Kobeissi reports.

“Ethereum is making HISTORY: We are currently witnessing one of the LARGEST short squeezes in crypto history,” it summarized in a dedicated thread on X. 

“Ethereum has added +$150 BILLION in market cap since July 1st, days after net SHORT exposure hit record highs.”

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

Data from Cointelegraph Markets Pro and TradingView confirms that ETH/USD gained 20% over the past week alone. 

Local highs of $3,610 on Bitstamp almost match the year-to-date record seen in early January. Compared to its 2025 low, the pair is up over 150%.

ETH/USD 3-day chart. Source: Cointelegraph/TradingView

Now, Kobeissi not only sees $4,000 coming next, but also continuation of the short squeeze.

“If Ethereum rises another 10%, another $1 billion of shorts will be liquidated,” it calculated alongside data from monitoring resource CoinGlass. 

“Furthermore, the fact that many of these shorts are leveraged is adding even more pressure. Ethereum could see $4,000 soon.”

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

Bitcoin dominance drops to March lows

Bitcoin meanwhile continues to consolidate below the psychologically significant $120,000 mark.

Related: Bitcoin golden cross that sparked 2,000% BTC gains is already here

At the same time, capital has been reported as flowing into altcoins as traders eye the potential for quicker returns.

Bitcoin’s dominance of the overall crypto market cap has halted a multi-year uptrend, falling to 61.4% this week — its lowest value since March.

Bitcoin crypto market cap dominance 1-week chart. Source: Cointelegraph/TradingView

“$BTC.D Has only dropped 4.5% from the local highs and we can already see its impact on alts and ALT/BTC pairs,” popular trader Daan crypto Trades observed on X Friday.

Daan Crypto Trades pinned the dominance drop on “outperformance” from ETH and XRP (XRP) in particular.

“When the market is eventually looking extremely overheated or shaky, capital will flee back into $BTC & Cash/Stables,” he warned, drawing a comparison to late 2024. 

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

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.