ETH Breaks $2,700: The Perfect Storm of Low Shorts and Big Money
- Keyword Financial
- Jul 9
- 3 min read
Introduction
Ethereum recently surged past the $2,700 mark, marking a significant recovery after dipping below this level in June. This rally coincided with a historic low in the long/short ratio on Binance’s ETH/USDT perpetual contracts, which fell below parity for the first time since April 2023. The sharp move triggered a classic short squeeze, as a wave of ETF inflows from Wall Street collided with a heavily net-short derivatives market, resulting in heightened volatility and rapid price action. The influx of new capital, rather than the closing of existing positions, was evident from the rising open interest in Ethereum futures, signaling fresh money entering the market and reinforcing the strength of the uptrend.
Looking ahead, several catalysts are expected to shape Ethereum’s market dynamics in the coming quarter. Analysts point to the potential for$10 billion in additional ETF inflows as more platforms launch, alongside the possibility of staking being enabled within US spot ETFs, which could attract another $5–7 billion. Corporate treasury adoption is also on the radar, with projections that the number of public companies holding ETH could rise from 5 to 50. Additionally, growing demand for block space from tokenized assets is expected to increase fee burn and enhance Ethereum’s yield profile. These factors are seen as supportive, especially after a first half of the year characterized by high but orderly leverage and record participation on the CME.
As the third quarter begins, traders are navigating a market where ETFs are absorbing spot supply while derivatives show a rare net-short bias. This confluence is likely to accelerate price discovery, with the next decisive move depending on macroeconomic data and regulatory developments. Despite the uncertainty, the structural demand from regulated funds remains strong, setting a measurable backdrop for Ethereum’s price action as the market enters a new phase of volatility and opportunity.
