Ether’s recent rally has injected a breath of fresh air into the cryptocurrency landscape. Between May 8 and May 9, Ethereum’s native token, ETH, soared by 29%, a remarkable upswing that seemingly signals the end of a prolonged 10-week bearish phase. Traders were left reeling as short (sell) positions worth over $400 million were liquidated, suggesting that major players were blindsided by the sudden shift in momentum.
A Market Divided
Despite the bullish price action, the mood in the derivatives market remains unexpectedly cautious. Traders have yet to pile into leveraged bullish positions, as reflected in the ETH futures premium, which hasn’t breached the neutral 5% mark. This hesitancy raises questions—are we witnessing a genuine trend reversal or merely a prelude to another test of the $2,000 resistance level?
According to crypto analyst Sarah Langford, “The lack of conviction in ETH derivatives suggests that while the price rally is impressive, the market isn’t fully convinced. We need to see stronger fundamentals to support these price levels.” This sentiment is echoed by the continued underperformance of ETH, which trails the altcoin market capitalization by 17% in 2025.
Ethereum’s Unyielding Core Strengths
Regardless of the price fluctuations, Ethereum’s network upgrades have fortified its leadership in decentralization and security. The platform boasts a total value locked (TVL) of $64 billion, eclipsing its nearest competitors—Solana, BNB Chain, and Tron—which collectively hold $22.3 billion. These figures underscore Ethereum’s dominance in the decentralized finance (DeFi) space.
Yet, the tepid demand for spot Ether ETFs cannot be ignored. Even as ETH experienced its strongest single-day surge in four years, US-listed Ether spot ETFs saw net outflows of $16 million on May 8, a third consecutive day of withdrawals. According to data from Farside Investors, this suggests a disconnect between price action and investor confidence.
The Trump Factor and Market Sentiment
Adding an intriguing twist to the narrative, US President Donald Trump’s recent shift in stance towards altcoins has coincided with Ethereum’s price resurgence. In a move that surprised many, Trump distanced himself from earlier endorsements of competing digital assets like Solana and Cardano, according to a Politico report dated May 8. This political pivot may have indirectly bolstered ETH’s appeal.
Nevertheless, the market’s lukewarm response to Ether’s rally could be attributed to a significant drop in Ethereum network fees, which have plummeted 85% from January to April. Lower network activity has diminished the demand for ETH, impacting net staking yields due to its burn mechanism.
A Path Forward?
Despite the apparent ambivalence in the derivatives and ETF markets, a rally towards $2,700 remains within the realm of possibility. If investor sentiment shifts, particularly in light of failed lobbying efforts from Ethereum’s rivals, ETH could regain its luster. However, as always in the volatile world of crypto, such predictions come with a caveat: the market’s future trajectory is anything but certain.
As we move into the latter half of 2025, all eyes will be on Ethereum to see whether it can sustain its newfound momentum or if the recent rally was just a flash in the pan. The coming months will be crucial in determining whether Ether can capitalize on its core strengths and overcome the prevailing skepticism in the market.
Source
This article is based on: Ethereum price greenlit for further upside after surprise 29% ETH rally
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
