- Ethereum recently surged 29%, ending a 10-week bear market, but demand for spot ETFs remains weak.
- Despite muted investor interest, Ethereum’s strong network fundamentals and leadership in decentralization support its bullish outlook.
Ethereum Price Surges 29% Amid Changing Sentiment
Ethereum’s price experienced a remarkable 29% rally between May 8 and May 9, likely marking the end of a 10-week bear market that saw ETH bottom out at $1,385 on April 9. This sharp move resulted in the liquidation of over $400 million in short (sell) ETH futures positions, catching many traders off guard.
Demand for Spot ETFs Remains Weak Despite Rally
Despite the impressive surge, demand for spot Ether exchange-traded funds (ETFs) and derivatives remains limited. Data shows that US-listed Ether spot ETFs recorded net outflows of $16 million on May 8, suggesting that investors remain cautious. Additionally, the ETH futures premium has not surpassed the 5% threshold typically associated with a neutral market.
Ethereum’s Network Fundamentals Remain Strong
Regardless of the muted demand for ETFs, Ethereum’s core fundamentals continue to stand out. Recent network upgrades have enhanced its scalability, solidifying its position as the leading platform for decentralization and security. Ethereum’s total value locked (TVL) currently stands at $64 billion, surpassing the combined TVL of major competitors Solana, BNB Chain, and Tron, which hold $22.3 billion collectively.
Market Awaits Next Move Amidst Regulatory Shifts
Investor sentiment around Ethereum could shift again, especially following recent comments from former US President Donald Trump. Trump’s reversal on certain altcoins has redirected attention toward Ethereum. With the possibility of another price rally, ETH may soon test the $2,000 level, provided that market sentiment turns more optimistic.
Will Ethereum Maintain Its Momentum?
While the current sentiment in ETH derivatives remains neutral, Ethereum’s strong fundamentals and leadership in the decentralized finance (DeFi) sector could support further price gains. However, traders should remain cautious, as the lack of demand for spot ETFs could signal potential volatility ahead.
