What exactly happened behind the 70% big pump of Ethereum in a single month?

Ethereum is making history:

We are witnessing one of the largest short squeezes in cryptocurrency history. Since July 1, Ethereum's market capitalization has skyrocketed by $150 billion—just a few days ago, net short positions had just reached an all-time high.

What exactly happened? This article interprets it for you.

Please see the chart below:

According to data from Zerohedge, as of July, the net leveraged short position of Ethereum reached an all-time high. In fact, the net short exposure is about 25% higher than the levels in February 2025. This directly led to a 70% surge in Ethereum in less than a month.

But the story is far from over.

President Trump's World Liberty Financial has been increasing its holdings in Ethereum. The latest trading records show that just 24 hours ago, the institution completed a purchase of 5 million dollars. This has added fuel to the already fierce short squeeze.

It is worth noting that these short positions mostly come from institutional capital.

What is even more intriguing is:

A report by Zerohedge shows that in the 30 days leading up to July 1, BlackRock's ETF increased its holdings of Ethereum for 29 days. However, as previously mentioned, the price continued to decline due to a sudden surge in leveraged short positions. Clearly, there was "smart money" anticipating this storm.

We are currently witnessing: billions of dollars in short positions being liquidated in succession. If Ethereum rises another 10%, another 1 billion dollars in short positions will be liquidated.

In addition, as these short positions are mostly leveraged, the market is facing stronger short squeeze pressure.

Ethereum may soon reach 4000 USD.

We have also observed a similar effect on Ripple, while Bitcoin continues to show relative strength. Bitcoin has officially returned to the $120,000 mark, with a market cap increase of $900 billion since the low in April. After several months of stagnation, Ethereum and Ripple have finally started to catch up to Bitcoin's gains.

We anticipated this trend in advance. Here are some warning tips we provided for premium members: We gradually bought the dip at price levels of 80,000, 90,000, and 100,000 dollars, and accurately predicted a target of 115,000 dollars. Last week, we raised the target to over 120,000 dollars, and this target has just been achieved.

More importantly, the market is digesting the blockbuster report released by FT today. President Trump is expected to sign an executive order this week allowing 401k pension plans to invest in cryptocurrencies. This will become one of the most significant positive developments in the history of cryptocurrency.

As of the first quarter of 2025, the scale of 401k pensions in the United States will reach $8.7 trillion. In contrast, the total market capitalization of cryptocurrencies is only $3.8 trillion. This means that an amount equivalent to 2.3 times the entire cryptocurrency market size is about to gain access. This is of epoch-making significance.

More importantly, the U.S. House of Representatives has passed three significant Bitcoin and cryptocurrency bills: the Clarity Act, the Genius Act, and the Anti-CBDC Act.

The biggest victory for the cryptocurrency industry is gaining bipartisan support. Candidates who refuse to accept cryptocurrency can no longer win elections.

As we have always emphasized: institutional capital can no longer ignore cryptocurrencies. Over the past 13 years, Bitcoin has achieved an annual compound growth rate of up to +90%, outperforming almost all assets globally.

We continue to receive feedback from institutional investors that their assets under management (AUM) are gradually allocating to crypto assets.

Looking to the future, the core logic driving the rise of cryptocurrencies will trigger significant macroeconomic changes. This is redefining the operational paradigm of financial markets.

Finally, don't forget the most powerful bull market engine for cryptocurrencies—the U.S. deficit spending crisis. Not only has Bitcoin risen by 55% since April, but the dollar index has also fallen by 10% this year. The dollar has fallen into an eternal bear market.