Ether's summer surge has ignited fierce debate among market analysts, with many pointing to mounting short positions and shifting capital flows as key drivers behind the rally. The world’s second-largest cryptocurrency is now trading near $3,755, up nearly 5.7% in the past 24 hours and more than 25% over the past week, according to CoinDesk Data. ETH holders have welcomed the rally, and some analysts believe it could accelerate further if a short squeeze forces bearish traders to close their positions. “$ETH is the most hated rally right now,” posted Crypto Banter on X, referring to the unusually high level of bearish positioning in the market. According to the CoinGlass data cited by the analyst, approximately $331 million worth of short positions could be liquidated if ether hits the psychologically significant $4,000 level. That liquidation cascade would likely accelerate price momentum in a classic feedback loop. Others see ether's outperformance as a clear sign of shifting market dynamics. Pentoshi, a well-followed trader on X, pointed to the steepest weekly drop in BTC dominance in four years as evidence of capital rotating into ETH. “Enjoy the next few weeks,” the pseudonymous analyst wrote, adding that ether's current trajectory resembles a “melt up” — a term used to describe rapid price increases driven more by fear of missing out (FOMO) than fundamentals. Pentoshi also noted a new structural tailwind: the emergence of ETH treasury strategy companies, which are aggressively accumulating ether on their balance sheets. “Now we have ETH treasury companies that are only a month old and into buying, competing to get 1% of the supply each,” he said. While not naming names, this likely refers to publicly traded firms like Bitmine Immersion Technologies and SharpLink Gaming, whose large-scale ETH acquisitions have drawn increasing attention. Adding to the chorus, crypto analyst Benjamin Cowen highlighted that altcoins continue to underperform relative to ether. “Alt/BTC pairs go up but they are lagging ETH/BTC,” he posted, suggesting that ether is capturing a disproportionate share of market flows. Cowen argued that ETH now carries lower relative risk than other altcoins and is behaving similarly to how Bitcoin did during previous cycles.
