Ethereum held above $2,500 on Aug. 27 after a record short squeeze and strong ETF inflows fueled its weekly breakout. Traders now watch whether a close above $2,550 can open the path toward $3,000.
Ethereum traded near $2,507, up about 7.8% from its Aug. 21 opening price of $2,326, holding the psychological $2,500 level after a sharp breakout earlier in the week. The token briefly touched a weekly high near $2,566 before settling into a narrow range.
A short squeeze kicked off the rally
The move followed the US Treasury's Aug. 19 announcement that it would at least double the size of its long-end liquidity-support bond buybacks, from $2 billion to $4 billion per operation, starting Sept. 9. Markets treated the change as supportive of liquidity-sensitive assets, since lower long-term yields tend to make cryptocurrencies more attractive relative to fixed income.
A record derivatives short squeeze then amplified the move. Nearly $3 billion in leveraged crypto positions were liquidated in 24 hours, with bearish bets accounting for about 92% of the total, and Ethereum jumped roughly 18% as short sellers were forced to close positions.
ETF inflows help ETH hold its gains
US institutional demand then helped Ethereum retain its gains. Spot Ethereum ETFs recorded about $697.2 million in net inflows during the week ending Aug. 21, their strongest week of 2026, part of a combined $2.6 billion entering US-listed Bitcoin and Ethereum funds. That demand offset isolated setbacks in decentralized finance, including an estimated $8.5 million loss tied to the Term Finance governance attack.
Traders watch the $2,550 resistance
Crypto trader Daan Crypto Trades said Ethereum needs to extend its rally soon, warning that otherwise traders risk "deviating back below the resistance and for this to turn into a big liquidity grab." Analyst Ted Pillows identified $2,550 as the decisive weekly resistance, saying a close above that level could open a move toward $3,000.
The daily chart places $2,656 as the next major target, followed by $2,812 if momentum continues. A drop below $2,343 would put the breakout at risk and raise the chance of a return to the prior trading range.
Source: crypto.news
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