Ethereum (ETH) has surged 29%, breaking from a ten-week bear market. This price jump liquidated over $400 million in short positions, yet derivatives demand appears muted. With a total value locked of $64 billion, Ethereum leads in decentralization despite limited ETF demand. Recent shifts in sentiment from President Trump could influence the market further.
Ethereum (ETH) has made headlines recently for its staggering price surge, achieving a remarkable 29% increment between May 8 and May 9. This upswing marks a potential end to a challenging ten-week bear market that saw prices plummet to $1,385 on April 9. The spike resulted in more than $400 million worth of short ETH futures being liquidated, leaving many traders—including whales and market makers—caught off guard by the sudden movement in the market.
Interestingly, despite this significant rally, the demand for ETH derivatives seems to remain somewhat lukewarm, with many traders adopting a neutral stance. It’s unclear whether this hesitance indicates a true recovery or simply a prelude to yet another test of the much-coveted $2,000 level. Presently, the ETH futures premium has not surpassed the 5% mark, which generally signals a neutral market, suggesting that interest in leveraged bullish positions is still quite limited.
Ethereum’s overall performance is also lagging behind, trailing the altcoin market by approximately 17% in 2025. Such underperformance further contributes to a noticeable lack of confidence among investors. While some analysts see this as a potential opportunity for short covering, others insist that the core fundamentals of Ethereum have yet to show significant improvement, leaving many sceptical.
On the brighter side, Ethereum has made strides in decentralization and security with recent network upgrades that have notably bolstered layer-2 scalability. Currently, Ethereum boasts a total value locked (TVL) of $64 billion, outclassing its three main competitors—Solana, BNB Chain, and Tron—who together hold just $22.3 billion.
However, the tepid demand for spot Ether exchange-traded funds (ETFs) raises alarms. It’s worth noting that even with Ether experiencing its most notable single-day price hike in four years, the asset still encountered a third day of net outflows. Data from Farside Investors revealed that US-listed Ether spot ETFs saw net outflows amounting to $16 million on May 8.
Moreover, a drastic 85% decrease in Ethereum network fees from January to April might also be affecting overall demand for ETH. When network activity wanes, it naturally leads to lower staking yields, as the protocol’s burn mechanism relies heavily on competitive data processing. The state of ETH options markets offers additional insights, revealing a neutral sentiment as put and call options are trading at similar levels, which may dampen hopes for bullish trends.
Interestingly, a recent shift in sentiment from President Donald Trump may provide some additional context. A Politico report suggests that Trump has distanced himself from specific altcoins after feeling “used” by lobbyists. This comes on the heels of a marked shift from earlier endorsements he made towards altcoins like Solana and Cardano, leading to speculation about how his opinions might sway investor sentiment moving forward.
Despite the evident disinterest in both the Ether derivatives market and its spot ETF flows, the possibility of ETH rallying toward the $2,700 level remains within reach—especially if investor outlook improves in light of the recent complexities within Ethereum’s competition.
Note: This information is provided solely for educational purposes and should not be construed as legal or investment advice. The views expressed here are solely those of the author and do not reflect the opinions of Cointelegraph.
