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Ethereum has managed to diverge from the broader crypto market trend, posting gains while the overall market experienced a drop in capitalization.

Over the past 24 hours, the global crypto market fell by 5.3%, yet Ethereum registered a 2.4% increase, currently trading around $3,719. This move has drawn renewed interest from analysts, particularly as on-chain data suggests shifting trader sentiment and positioning.

Short Squeezes and Whale Activity Shape Ethereum’s Recent Rally

Amr Taha, a contributor on CryptoQuant’s QuickTake platform, highlighted the significance of Ethereum’s recent price action. Taha noted that a sudden breakout above $3,700 resulted in over $160 million in short positions being liquidated on Binance.

This event followed an earlier wave of $195 million in short liquidations near the $3,500 mark, pointing to a pattern of cascading short squeezes. As short-sellers rushed to cover their positions, this led to additional upward price momentum, at least temporarily.

Taha also observed a notable divergence in whale activity across assets. According to data from the Whales Screener, there was a net inflow of over $300 million worth of Bitcoin to centralized exchanges. At the same time, over $300 million in stablecoins was withdrawn from exchanges.

This combination may reflect a cautious outlook, as whales potentially prepare to sell Bitcoin while simultaneously reducing available liquidity for immediate buy-side activity.

Taha cautioned that such short squeezes can result in brief periods of elevated prices, often followed by consolidation or correction.

He identified several signs suggesting potential short-term headwinds: a drop in open interest following the liquidation cascade, whale deposits of BTC possibly in preparation for selling, and reduced exchange balances of stablecoins indicating limited new capital entering the market. “These conditions combined could contribute to a pullback if fresh inflows don’t materialize,” Taha wrote.

ETH’s Outlook as Market Enters Second Half of 2025

In a separate analysis, another CryptoQuant analyst Crypto Dan provided a broader perspective on Ethereum’s trajectory. While acknowledging that the recent price surge may introduce short-term correction risk, Dan argued that market indicators suggest this would likely be limited in scope.

Comparing current conditions to historical futures market overheating in March and November 2024, Dan pointed out that current leverage and sentiment levels remain relatively muted.

He also noted that Ethereum’s performance has been restrained throughout this upcycle, even reaching undervalued levels at times. This could indicate that the asset still has room to rise, especially in the second half of 2025.

If Ethereum continues to climb, Dan suggested it could also serve as a catalyst for altcoin activity, given their tendency to follow ETH movements in bull phases.

Featured image created with DALL-E, Chart from TradingView

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The rally has drawn attention to whether SUI is gearing up for a more sustained recovery or if this surge is merely a short-lived reaction before another downward move. Despite the optimism, the broader market remains highly volatile, and SUI still faces key resistance levels that might determine the strength of this uptrend.

SUI Price Attempts Recovery

SUI’s price faced rejection after attempting to push higher, signaling possible weakness in the current recovery attempt. After climbing to the 50% Fibonacci retracement level at $3.079, the cryptocurrency struggled to sustain its upward momentum, encountering resistance that prevented further gains. 

This rejection has triggered a fresh decline, indicating that sellers are defending key levels. As a result, the asset has started to lose traction, with bearish pressure mounting again. The decline could accelerate, leading to a deeper retracement If the price fails to find support at nearby levels.

Furthermore, SUI is still struggling to gain bullish momentum as it trades below the 100-day Simple Moving Average (SMA) and remains under pressure from a key bearish trendline. Typically, this indicates that sellers are still in control, preventing a breakout toward higher levels. A decisive move above these resistance points could signal a trend reversal, but failure to do so may result in more downside pressure.

Technical Indicators: A Mixed Picture

From a technical perspective, the recent recovery above $2.8 is a promising development. SUI’s Moving Average Convergence Divergence (MACD) shows early signs of a bullish crossover, which could signal upside potential if the momentum continues.

However, challenges remain with the $3.5 level cited as a significant resistance zone, and a failure to break through hints at renewed selling pressure. Additionally, trading volumes are improving, but are still below their peak levels.

In conclusion, SUI must overcome two major hurdles to confirm a meaningful recovery: the 100-day SMA and the bearish trend line. A break above these levels, accompanied by strong volume, might open the door to higher price targets, including $3.0 and beyond. On the other hand, a failure to hold above $2.8 sparks a retest to lower support levels, reigniting the downtrend.