Ethereum Price News: Early Santa Rally? ETH Squeezes Bears Out in Just 4 Hours

Ethereum (ETH) has gone up by more than 8% in the past 24 hours as the price started a vertical climb right after the New York session opened.

Just a day before the last FOMC meeting of this year, the market has decided to push ETH out of its downtrend, possibly setting the stage for a massive short squeeze.

Data from CoinGlass shows that short liquidations spiked to $260 million in the past 4 hours alone as ETH rose $3,100 to $3,400 during this period.

Crypto Liquidations – Source: CoinGlass

Market Conditions Improve as Fed Prepares to Cut Rates

Market sentiment has been improving lately as the U.S. Federal Reserve prepares to cut rates for a third time tomorrow.

Meanwhile, Ethereum recently completed the rollout of another major technical upheaval – the Fusaka upgrade. This is the second overhaul that the network deploys this year, following the successful implementation of the Pectra upgrade.

The result: a more scalable blockchain that now offers lower transaction fees and faster transaction processing speeds at a point when institutional adoption is skyrocketing.

The past few months have been quite positive for the crypto industry, even though the market has tanked. The smart money may ignore, but they do not forget, and what has happened this year has been pivotal in accelerating the adoption of cryptos around the globe.

A supportive regulatory environment in the United States, the launch of dozens of exchange-traded funds (ETFs) linked to top altcoins, and Wall Street’s growing appetite for cryptos, reflecting a shift in how the world is viewing cryptos.

ETH made a new all-time high this year, but quickly succumbed after a dramatic October 10 flash crash that ruined the market’s positive attitude.

Could altcoins be ready to make a comeback after today’s sharp uptick?

ETH Breaks Above 200-Day EMA as Positive Momentum Accelerates

Trading volumes have spiked by 13% to nearly $30 billion, currently accounting for almost 8% of the asset’s circulating market cap.

The daily chart shows that today’s price action has broken out of ETH’s descending price channel and has pushed the token above the 200-day exponential moving average (EMA).

This favors a bullish long-term outlook for the token, although it is still too early to tell if this green candle will finish the day above that key line.

ETH/USD Daily Chart (Binance) – Source: TradingView

Meanwhile, the Relative Strength Index (RSI) has jumped above the mid-line and the 14-day moving average. This is commonly interpreted as a buy signal as it means that positive momentum has accelerated.

Recapturing the $3,500 level would be massive for ETH as it would confirm a trend reversal and fully invalidate the token’s downtrend. Bears will likely be caught off guard as market sentiment was heavily depressed heading to the FOMC.

The Fear and Greed Index stood at 24 as of today. But, as we mentioned in previous Ethereum price predictions, these low readings (record low of 11 just a few weeks ago) typically signal that the market has reached a local bottom.

Hence, if we get to $3,500, we may close the year at $4,000. Cryptos’ 2025 wild ride continues. Is this a Santa Rally in the making?