Ethereum Rebounds After Short Squeeze, Recovery Still Unconfirmed

Overview

• A fast short-covering rally on July 2–3 pushed ETH up more than 5% in 24 hours and lifted the price into the $1,600–$1,650 range.
• Analyst Ali Martinez flagged a rare TD Sequential monthly buy signal on the monthly chart, a technical reading that traders watch for a potential trend flip.
• Derivatives activity rose sharply as over $92 million in ETH short positions were liquidated and futures and options volume, open interest, and taker buy-sell ratios all increased.
• Institutional flows and on-chain moves temper the bounce: Ethereum spot ETFs have net outflows of about $358.3 million since June 17 and a whale moved 16,842 ETH to an exchange, which raises near-term supply risk even though a transfer is not proof of immediate selling.
• Market watchers say ETH must reclaim the $1,700–$1,750 band to validate the rebound, otherwise the token risks revisiting yearly lows after losing the $3,200 and $2,000 supports earlier in 2026.