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Ethereum had its best day in months on Wednesday. The token surged 17.48% to $2,251 as leveraged short positions were forcibly liquidated
Written by:
Sophia Cruz•Thursday, August 20, 2026•2 min read
•Last updated: Thursday, August 20, 2026
Ethereum had its best day in months on Wednesday. The token surged 17.48% to $2,251 as leveraged short positions were forcibly liquidated across derivatives markets, triggered by Trump’s meeting with crypto executives at the White House and his public push for the Senate to pass a fair version of the Clarity Act.
The move was not gradual. It was a squeeze. A $1.14 billion cascade of forced short liquidations powered the rally, lifting Strategy shares 12%, pushing Coinbase higher, and dragging <a href="https://xpertsstudio.com/why-did-bitcoin-price-surge-11-above-71000/” title=”Why did Bitcoin price surge 11% above $71,000?”>Bitcoin toward the $70,000 mark in the process. When that much leverage gets cleared out in a single session, the price action tends to be sharp and fast, which is exactly what happened.
Ether is now up roughly 19% over the past seven days, hitting a three-month high in the process. For context, the token had been grinding between $1,850 and $1,970 for most of the past month, struggling to find a reason to move in either direction. Wednesday gave it one.
The policy backdrop matters here. Trump met with executives from Coinbase, Payward, and Blockchain at the White House, reiterating his desire to make the United States a global digital asset hub. The Clarity Act remains stalled in the Senate over ethical standards and other bipartisan sticking points, but the administration’s visible support improved investor expectations for the regulatory environment regardless.
The SEC added its own piece to the picture. The agency proposed new crypto asset rules that would create a dedicated securities issuance framework for certain digital asset investment contracts, including two registration exemptions: one allowing issuers to raise up to $5 million over four years, and another permitting up to $75 million in any 12-month period with varying disclosure requirements based on fundraising scale.
Thomas Lee at Fundstrat described the past two days as the second-largest short liquidation event in crypto history. That framing puts Wednesday in perspective. This was not organic buying pressure building slowly. It was a political catalyst landing on a market that had been heavily short for weeks, and the unwind did what those situations tend to do.
Ether remains well below the all-time high of $126,198 Bitcoin hit last October, and ETH itself peaked near $5,000 in August 2025. Wednesday’s rally closed some of that distance, but the road back is still long. Whether the Clarity Act actually clears the September 15 Senate procedural vote is what determines whether this is the start of something or just a very good day.
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ABOUT THE AUTHOR
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Sophia Cruz
Financial Writer – Asian & European Desks
Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.
Source: www.fxleaders.com