Ethereum Rises by 11% on ETF Inflows, US Treasury Liquidity Signal
Ethereum (ETH) extended its rally, rising 11.07% to $2,321.00, significantly outperforming Bitcoin’s +6.41% move, driven primarily by a macro liquidity spark that ignited institutional buying and a massive short squeeze.
With more than $36 billion in transaction value over the last 24 hours in the crypto exchange, Ethereum recorded a significant jump of 90% in trading volume on Thursday.
Traders said the key driver of the momentum was a surprise U.S. Treasury policy shift, which doubled long-term bond buybacks, weakening the dollar and boosting risk assets like Ethereum.
The U.S. Treasury announced on Aug. 19 it would double its long-dated bond buyback operations to at least $4 billion each, a move interpreted as improving market liquidity.
This weakened the U.S. dollar and lowered long-term yields, prompting capital to rotate into higher-beta crypto assets like Ethereum.
The rally was ignited by a shift in traditional finance policy, underscoring crypto’s growing sensitivity to macro liquidity conditions.
The Treasury’s buyback program is scheduled to run until Nov. 4, 2026; its continuation will influence the macro backdrop.
Supporting the momentum, Spot Ethereum ETFs recorded their largest daily inflow since October 2025 at $189.15 million on Aug. 19, signalling renewed institutional demand.
Concurrently, a heavily leveraged market led to the liquidation of over $1 billion in short positions, forcing rapid buy-side pressure. Real buying from ETFs provided a foundation, while excessive leverage turned a rally into a parabolic squeeze.
The immediate technical structure is overextended, with the daily RSI at 82.2 signalling overbought conditions. Key support now lies between $2,220 and $2,250.
Technical traders said the trend is bullish but vulnerable to a sharp correction if speculative longs unwind. A daily close above $2,300 would confirm continuation toward $2,400; a break below $2,220 would signal a deeper correction is underway.
Ethereum’s surge was triggered by macro liquidity, accelerated by ETF demand, and supercharged by a short squeeze, creating a powerful but fragile rally.
