Author: White55, Mars Finance

Prologue: Price Breakthroughs and Whale Movements

On June 10, 2025, the price of Ethereum broke through $2,827 with a fierce offensive, setting a 15-week high. Behind this figure, a liquidation storm involving $1.8 billion in short positions is brewing. In this seemingly accidental market, the operation trajectory of a mysterious giant whale has become a key footnote to interpreting market sentiment.

 ETH whale trading activity. Source: Lookonchain/X

According to the on-chain tracking platform Lookonchain, an anonymous address completed two precise sniping attacks within 44 days:

• Round 1 (April 27): 30,000 ETH were raised through Wintermute OTC at an average price of $1,830, costing $54.9 million;
• ​​Round 2​​ (May 27): Sold the same amount of chips at $2,621, making a profit of $23.73 million, with a yield of 43%;
• ​​Final harvest​​ (June 10): Sold 30,000 ETH again through over-the-counter transactions for $82.76 million, locking in a profit of $7.3 million and a total of $31 million.

This type of operation is by no means an isolated case. CoinGlass data shows that Ethereum futures open interest (OI) has exceeded the $40 billion mark for the first time, and the market leverage ratio has approached the critical point. The current liquidity map shows a delicate balance: $2 billion of long liquidation risk gathers around $2,600, while $1.8 billion of short liquidation ammunition lurks above $2,900. This long-short confrontation is just like a replica of the CDO market in "The Big Short" - any direction breakthrough will trigger a chain reaction.

Chapter 2: Ecological Expansion and Value Cracks

Behind the price frenzy, the Ethereum ecosystem is undergoing structural changes.

 Ethereum weekly address participation chart. Source: growthepie

According to growthepie data, independent active addresses surged by 70% in the second quarter, reaching a peak of 16.4 million on June 10. The Base network became the growth engine with a share of 72.81% (11.29 million addresses), far exceeding the 14.8% (2.23 million addresses) of the Ethereum main network. This "satellite chain feeding back to the main network" model is completely different from the narrative logic of the DeFi Summer in the 2020s.

Although Ethereum still accounts for 61% of the DeFi market with a TVL of $66 billion, its core revenue model has shown concerns:

• ​​Transaction fee collapse​​: In the past 30 days, network transaction fees were only US$43.3 million, a 90% drop from before the Cancun upgrade;
• ​​Staking income dilemma​​: While Blob technology reduces the cost of Layer2, the annualized income of stakers continues to stagnate at 3.12%, far inferior to competitors such as Solana;
• ​​Regulatory shackles​​: The SEC's review of ETH pledge has led to a net outflow of $369 million in spot ETF funds for eight consecutive days, and cracks have appeared in institutional faith.

This contradiction is embodied in the on-chain data of Glassnode: the proportion of "diamond hands" addresses holding ETH for more than 1 year dropped sharply from 63% to 55%, while the selling volume of short-term holders surged by 47%. When technological upgrades fail to translate into benefits for holders, ecological prosperity becomes a driver of value dilution.

Chapter 3: The Bloody Compass of the Derivatives Market

The futures market is surging, with ETH futures open interest (OI) exceeding $40 billion for the first time in history, indicating a high market leverage. The sharp rise in open interest indicates potential volatility.

 Ethereum liquidations chart. Source: CoinGlass

CoinGlass liquidation heat map reveals the cruel logic of capital game:

• Bullish minefield: $2 billion of forced liquidation risk accumulates in the $2,600-2,665 range, which is exactly the 50% Fibonacci retracement level of the 2024 bull market;
• ​​Bear Graveyard​​: $1.8 billion of short positions are hanging by a thread above $2,900, which corresponds to the historical low of ETH/BTC exchange rate of 0.019;
• ​​Institutional duality​​: CME Ethereum futures open interest accounts for 9%, which contrasts with the 24% institutional dominance of Bitcoin futures, suggesting that traditional capital is still on the sidelines.

The abnormal prosperity of the derivatives market is actually the manifestation of a liquidity trap. When the perpetual contract funding rate continues to be negative and the taker's buy-sell ratio falls below 1, the market has entered an "extremely bearish" state. In this environment, the OTC cashing out of whales is more like a signal of exit before the doomsday carnival - after all, historical data shows that the probability of a black swan event occurring within three months after a record high in open interest is as high as 68%.

Chapter 4: Technical Codes and Macroeconomic Variables

Judging from the K-line pattern, the current market situation has hidden secrets:

• Volatility squeeze: The daily Bollinger Band narrowed to 5%, the lowest level since February 2024, indicating that a breakout is imminent;
• ​​Weekly paradox​​: The price is stable above the 50-week and 100-week EMAs, but the MACD histogram shows a top divergence, and the RSI value of 42 suggests insufficient upward momentum;
• Fibonacci shackles: The daily closing price of $2,800 will become the watershed between long and short positions. A breakthrough will open up the theoretical space of $3,200-3,500. Otherwise, it may fall back to $2,500 to achieve price support.

At the macro level, the geopolitical negotiations between the United States and Russia and the expectation of the Federal Reserve to cut interest rates constitute a double disturbance. CME interest rate futures show that the market has priced in 2-3 interest rate cuts in 2025 at 79%. If the actual path deviates, the crypto market will bear the brunt. Standard Chartered Bank warned that if the RWA (real world asset) narrative fails to be fulfilled in Q3, Ethereum may face the risk of evaporating $100 billion in market value.

Epilogue: The Eve of the Paradigm Revolution

Ethereum is at a historical crossroads:

• ​​Reconstruction of staking economy​​: Through EIP-7251, the upper limit of validator node staking will be increased to 2048 ETH, and the exit mechanism will be optimized to alleviate the liquidity crisis;
• ​​Layer2 value feedback​​: Force Arbitrum and other Layer2 to allocate part of the fee income to the main network, solving the paradox of "ecological prosperity and main network anemia";
• Regulatory breakthrough: If the SEC's ruling on the 21Shares collateralized ETF is passed in Q3, it is expected to bring a short-term increase of 15-20% and lock in 8% of the circulation.

As Peter Brandt said, after breaking through the $2,800 congestion pattern, Ethereum may start the "moon landing" market to $5,232. But be careful, the essence of this capital game is still leverage-driven liquidity hunting - when the $1.8 billion short position turns into fuel, the market will eventually verify: who is driving the trend and who is swimming naked.