Ether jumped 4.5% to $1,980 on Tuesday, pushing the second-largest cryptocurrency within striking distance of the $2,000 mark. The rally, which lifted Ether's market cap to $237 billion, was fueled by rising inflows into Ether exchange-traded funds and a pickup in staking activity, according to market data from Bitstamp.
Why Ether Jumped
The price move came as investors poured money into spot Ether ETFs for a third straight session. Combined inflows across the U.S.-listed funds reached $242 million last week, the highest weekly total since their launch. At the same time, the amount of Ether locked in staking contracts climbed to 34.2 million ETH, a record high, signaling that holders are committing tokens to secure the network rather than selling them.
Staking yields have held steady around 3.2%, making Ether an attractive alternative to traditional fixed-income products in a low-yield environment. The combination of ETF demand and staking supply constraints has created a tailwind for prices.
Short Sellers Caught Off Guard
The rapid ascent caught bearish traders flat-footed. Data from Coinglass shows that $113 million in short positions were liquidated across exchanges as Ether climbed. Short liquidations occur when traders who bet on a price decline are forced to buy back the asset to cover their positions, adding further upward pressure.
Ether's move above $1,950 triggered a cascade of stop-losses and margin calls, accelerating the rally. The liquidation event was the largest for Ether since early March, when a similar squeeze pushed prices above $2,000.
The $2,000 level has acted as both support and resistance in recent months. Ether briefly traded above that threshold in March but failed to hold. This time, the rally is backed by stronger fundamentals: ETF inflows are still in their early stages, and staking continues to grow.
On the downside, a failure to break $2,000 could lead to profit-taking. The next major support sits around $1,900, a level that held during last week's sell-off. Traders are watching whether Ether can sustain its momentum and close above $2,000 in the coming sessions.
