Ethereum breaks above $4,000 for the first time since December 2024

Ethereum (ETH) broke above $4,000 for the first time since December 2024, fulfilling the expectations for an ongoing rally. Over $24M was liquidated from short positions in only an hour. 

Ethereum (ETH) broke the long-awaited barrier of $4,000 for the first time since December 7, 2024, causing over $24M in short liquidations. ETH also led 24-hour liquidations, with $119M in short positions erased. 

Following the recent liquidations, ETH open interest remained at $26.65B, near its three-year peak. In the past 24 hours, open interest rose by around 6.8%, with accumulated long positions above $3,850. 

ETH is up over 62% in the past three months, with the biggest climb kicking off in July. The token rose to $4,001.13 on Gate.io, with almost all exchanges at just under $4,000. Binance data showed ETH climbed above $4,012 briefly.

On Hyperliquid, short liquidations shifted the balance of positions. 29,307 traders are long on ETH, while only 14,332 traders are shorting the token. The biggest ETH short position on Hyperliquid has a nominal value of $339.16M, and was over $35M underwater during the latest price expansion.

ETH reflected a shift in sentiment

In the past weeks, ETH moved on a mix of peak spot demand from whales, as well as record open interest on derivative markets. The mix resulted in an accelerating rally after months of stagnant prices. ETH also rose to 0.033 BTC, accelerating faster than the leading coin. After the latest rally, ETH dominance returned to 12.1%, boosting hopes of an altcoin season. 

The extremely rapid rally also meant market sentiment went through anomalies. Crowd money is extremely bullish, while smart money has turned bearish. However, the attempts to short ETH are also the main factor behind the price expansion. 

At this price range, over 95% of traders are in profit, with little pressure to sell. Whales have already established a lower baseline price, and ETH is expected to extend its rally to a higher range and reflect the chain’s utility. 

With $ETH reaching $4,000 for the first time since December 2024, 95% of on-chain holders are now in profit. pic.twitter.com/AfEROdmWaL

— CryptoRank.io (@CryptoRank_io) August 8, 2025

Based on Kaito data, the current ETH rally also happens with the most positive sentiment for the past 12 months. The rally arrived soon after ETH dipped as low as $1,400, while whales repositioned with a lower cost basis. 

The recent rally still needs to break the resistance above $4,000 to attempt a new all-time high and fulfill the short-term $5,000 predictions.

ETH price rally boosts DeFi

Total value locked on Ethereum is now at levels not seen since early 2022, with over $86B in various protocols. Currently, lending is more mature, and liquidatable positions are as low as $997 per ETH. 

The increasing demand for lending also boosts ETH buying, leading to a bigger potential rally. Currently, buyers far surpass new weekly ETH production, with more tokens held closely in accumulation addresses. ETH is also staked or wrapped, more rarely leaving the ecosystem.

A bigger price rally may mean ETH will try to break its DeFi records from 2021. Since the 2021 bull market, ETH has only recovered eight times above $4,000, later breaking down to a lower range. The most recent rally still sparks hopes of an ongoing expansion.

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