Ethereum rebounds to $1,800 as short squeeze and easing tensions fuel rally

Ether climbed to nearly $1,800 on July 10, recovering from a 2.6% drop to $1,725 as easing US-Iran tensions and an aggressive short squeeze across crypto derivatives restored appetite for risk assets.

"Ethereum looks technically stronger, holding above key moving averages with $1,800 as resistance," Riya Sehgal, research analyst at Delta Exchange, said. A sustained move above that level would confirm a short-term bullish trend.

The rebound followed a sharp reversal in derivatives positioning. Funding rates on perpetual swaps had turned negative before the squeeze, reflecting bearish positioning that quickly unwound as buyers stepped in. The move tracked a broader recovery in risk assets after oil prices eased from their spike above $70 a barrel, with President Trump signaling Iran wants a deal, according to reports.

The $1,800 level is the immediate resistance. A break above it could open the path toward $2,000, though on-chain data shows heavy supply overhead. The realized price for addresses holding 10,000 to 100,000 ETH sits at $2,050, while the 1,000 to 10,000 ETH cohort has an average cost basis of $2,250, according to CryptoQuant. Any recovery into that region may face selling pressure from underwater whales looking to exit near breakeven.

Whale Cost Basis Creates Supply Wall Above Market

Ethereum's on-chain structure shows a dense cluster of overhead supply. The realized price — the average acquisition cost — for addresses holding 100 to 1,000 ETH is around $2,400, while the 100,000-plus ETH cohort has a realized price near $1,700, roughly matching Ether's current level, CryptoQuant data shows. When spot price trades below realized price, a cohort sits at an unrealized loss on average.

That puts a broad $2,000 to $2,400 cost-basis cluster above the market. Any rally into that zone could trigger selling from holders looking to exit near breakeven, making a sustained push toward $2,000 harder without a significant volume catalyst.

Short Squeeze Resets Positioning

The derivatives reset was abrupt. After days of negative funding rates signaled bearish dominance, the snap higher forced short positions to cover, accelerating the move. Open interest on ETH futures rose as the squeeze unfolded, with traders now watching whether follow-through buying can sustain the rally above $1,800.

The broader macro backdrop remains fragile. The US launched strikes on more than 80 sites in Iran on Wednesday, while Tehran retaliated against US-linked facilities in Bahrain and Kuwait, putting a fragile truce at risk. Any renewed escalation could reverse the risk-on move that lifted Ether.

This article is for informational purposes only and does not constitute investment advice.