Ethereum ($ETH) has surged nearly 2% over the past 24 hours, reaching the previously forecast target of $2,800 as improving technical and on-chain indicators support the possibility of further gains.
The latest rally strengthens the argument that Ethereum’s previous bearish cycle ended when the cryptocurrency fell to approximately $1,550.
Since establishing that low, $ETH has recovered sharply and broken out of a bullish continuation pattern, putting the next major upside target near $3,400.
Although the broader macroeconomic environment remains challenging, rising trading activity, renewed exchange-traded fund inflows and a notable on-chain signal suggest that buyers are regaining control of the market.
Ethereum trading activity surges as shorts get liquidated
Ethereum’s trading volume reached approximately $20 billion during the latest rally.
That figure represents nearly 6% of the cryptocurrency’s circulating market capitalization and points to stronger participation from traders.
The move formed part of a broader cryptocurrency rally that forced bearish traders to close leveraged positions.
Total crypto short liquidations reportedly reached $924 million on Monday, their highest level since August, after several major digital assets broke through important resistance zones.
Ethereum accounted for roughly one-fifth of those liquidations.
Forced closures of short positions can add momentum to a rally because traders must buy back the asset to settle their positions. This process may have accelerated $ETH’s move toward $2,800.
However, liquidation-driven rallies can also produce considerable volatility.
Ethereum will need sustained spot demand and continued capital inflows to preserve its momentum after the immediate short squeeze subsides.
US spot Ethereum ETFs began the week on a stronger footing, recording approximately $270 million on Monday and $162.31 million on Tuesday.
The renewed demand coincided with $ETH’s double-digit price increase and its breakout from a bullish flag pattern.
Despite the positive daily reading, the monthly trend remains relatively modest. Ethereum ETFs reportedly attracted $620 million so far in September.
At that pace, the funds would finish the month with approximately $750 million in net inflows.
Such a result would represent a decline of about 50% from August’s total. Nevertheless, that projection is based on a simple run rate and could change quickly if Ethereum continues rising and attracts additional institutional demand during the remainder of the month.
Stronger and more consistent ETF inflows would improve the bullish outlook by showing that the rally is receiving support from regulated investment products rather than relying primarily on leveraged derivatives activity.
Ethereum’s on-chain data also appears to support the possibility that a new bullish phase has begun.
Santiment’s 365-day Market Value to Realized Value, or MVRV, ratio has risen to 3.6%, moving above zero for the first time since October 2025.
The MVRV ratio compares Ethereum’s current market capitalization with the combined value of tokens at the prices at which they last moved.
A positive reading indicates that the average holder within the measured period is sitting on an unrealized profit.
According to the historical pattern cited in the original analysis, the previous four occasions when the indicator crossed above zero following a prolonged bear market were followed by advances toward approximately $4,000.
Historical performance does not guarantee a similar outcome this time.
Still, the latest crossover adds another constructive signal to Ethereum’s improving price structure and growing market momentum.
Can Ethereum extend its rally toward $3,400?
Ethereum has broken above a bullish flag pattern that developed after its strong August rally.
A flag is typically viewed as a continuation formation, representing a temporary consolidation before the prevailing trend resumes.
Using the height of the pattern’s flagpole to project the potential move produces an upside target of approximately $3,400. From the $2,800 region, reaching that level would represent a gain of roughly 21.4%.
The $2,800 area remains the key level to watch. A decisive daily close above it, followed by a successful retest as support, would strengthen the breakout and could create a clearer path toward $3,000 and ultimately $3,400.
Momentum indicators currently favor buyers.
Ethereum’s Relative Strength Index has crossed above its signal line and reached approximately 69, placing it just below the conventional overbought threshold of 70.
That reading confirms strong bullish momentum, but it also suggests the rally may be becoming stretched.
Failure to hold above $2,800 could trigger profit-taking and a short-term pullback before $ETH attempts another advance.
For now, the combination of stronger volume, positive ETF flows, improving on-chain data, and a technical breakout keeps the broader outlook bullish.
