Ethereum surged 5% to $1,966 on July 27, driven by rising spot demand and short liquidations that pushed the price closer to the key $2,000 milestone. Trading volume on spot markets soared by 118.53% within 24 hours, hitting $9.21 billion, signaling strong buyer participation rather than low liquidity conditions.

The daily chart reveals resistance near $1,981.50 and $2,000, with the intraday high reaching $1,981.24 before a slight pullback. This price zone aligns with the 100% Fibonacci retracement level, marking a key test for Ethereum's recent upward momentum. The 4-hour RSI climbed to 73.36, reflecting strong bullish momentum but also suggesting the possibility of a short-term correction.

Ethereum has reclaimed the 78.6% Fibonacci retracement level at $1,880.97, with support levels at $1,802.05, $1,746.62, and $1,691.19 below. The daily Supertrend indicator flipped bullish, currently offering support around $1,772.31. Falling below this point could jeopardize the ongoing recovery.

The surge coincided with a spike in staking, which hit a record 34%. Since staked ETH cannot be instantly sold on the spot market, the liquid supply tightens during periods of strong demand. also higher Layer 2 activity and increased decentralized finance usage have boosted smart contract executions. Under Ethereum Improvement Proposal 1559, parts of transaction fees are burned, further decreasing circulating ETH and amplifying price moves on demand surges.

While these supply dynamics don't guarantee continued price jumps, they create conditions where buyers may need to offer higher bids to secure large volumes. US-based Ethereum exchange-traded funds also contributed, recovering from volatile outflows earlier in July to show steady net inflows recently.

Analysts eye $2,350 to $2,500 as potential targets if Ethereum manages to hold above $2,000, though significant use clusters near the $1,980 to $2,000 range pose risks, with downside liquidity seen around $1,930.

Ethereum’s climb follows a broader uptick in crypto market activity, similar to the recent surge in tokenized stocks trading on platforms like Robinhood Robinhood Chain Sparks 5x Surge.

ETH price hovered near $1,966 after reaching an intraday peak, while market participants watch closely for the next directional move.