Ethereum has risen 27% over the past seven days after breaking above $2,000, with the move accelerated by the liquidation of heavily positioned short trades. The rally has also been supported by stronger institutional demand, improving market sentiment and expectations of more favorable US policy toward digital assets.
Ethereum-linked exchange-traded funds recorded more than $1.2 billion in inflows during August, according to SoSoValue. That was the strongest monthly inflow since August 2025, when ETH reached its most recent record high.
Policy and liquidity expectations support risk assets
Investors have responded positively to proposed crypto-related concepts from the US Securities and Exchange Commission. The framework could give some crypto projects greater flexibility to raise capital without going through the traditional securities-registration process.
Additional support has come from the Treasury Department’s plan to double its bond buybacks starting in September. The program is expected to inject billions of dollars of liquidity into financial markets, potentially benefiting risk-sensitive assets such as cryptocurrencies.
Broader sentiment has shifted sharply alongside Ethereum’s price recovery. The Crypto Fear and Greed Index has climbed from below 40, a fear reading, to 80, indicating extreme greed. That is its highest level since December 2024, when Ethereum traded near $4,000. The change points to a more aggressive risk appetite, although it also raises the possibility of a short-term pullback.
Trading volume has not yet confirmed the move
On-chain and market data are improving, but one important confirmation signal has yet to appear. The gap between Ethereum’s seven-day and 30-day average trading volumes has narrowed as buying activity has returned and short positions have been squeezed.
A bullish crossover would occur if the seven-day average moves above the 30-day average. The analysis identifies that pattern as a signal that marked the beginning of previous Ethereum bullish cycles over the past three years. Until it happens, the rally lacks full volume-based confirmation.
Analysts place the next targets at $2,200 and $2,800
Ethereum’s weekly outlook has turned bullish, with a medium-term target of $2,800 replacing an earlier forecast that called for a decline to $1,600 during the first half of 2026. A sustained break above $2,200 is viewed as a potential buy signal, after which ETH could consolidate between $2,200 and $2,800.
Momentum indicators also suggest that the market may need to cool. Ethereum’s weekly Relative Strength Index has reached 88, placing it deep in overbought territory. A retreat toward $2,200 could ease that pressure and create a stronger base for another advance. A failure to hold $2,200, however, would weaken the current bullish setup.
If Ethereum holds above $2,200 and later breaks through $2,800, historical price patterns point to a possible long-term target near $5,400. That projection remains conditional on continued ETF demand, supportive liquidity conditions, successful network upgrades and sustained trading momentum.
Glamsterdam upgrade could become the next catalyst
Ethereum’s planned Glamsterdam upgrade is another potential driver for the market. A smooth rollout could strengthen confidence in the network’s development roadmap and technical capacity, much as the Pectra upgrade in April 2025 coincided with improving market momentum. Its eventual impact will depend on implementation, adoption and wider financial-market conditions.
