Ether (ETH) experienced a significant rally on May 8, with its price surging by 29% between May 8 and May 9. This marked a potential end to a 10-week bear market that had bottomed out at $1,385 on April 9. The sudden spike in price led to the liquidation of over $400 million in short ETH futures positions, catching whales and market makers off guard.

Despite this impressive surge, the demand for spot ETH ETFs and derivatives has remained subdued. The ETH futures premium has not exceeded the 5% threshold typically associated with a neutral market, suggesting limited demand for leveraged bullish positions. Traders have maintained a neutral stance in ETH derivatives, with some analysts viewing this as an opportunity for further short covering, while others argue that Ethereum's fundamentals have yet to show significant improvement.

Despite the lackluster performance in the derivatives market, Ethereum has continued to lead in decentralization and security. Recent network upgrades have enhanced layer-2 scalability, solidifying Ethereum's position as the leading platform. Ethereum's total value locked (TVL) currently stands at $64 billion, significantly higher than its competitors Solana, BNB Chain, and Tron, which collectively hold a TVL of $22.3 billion.

The muted enthusiasm for spot Ether exchange-traded funds (ETFs) is seen as a warning sign, with even the strong single-day price performance failing to prevent net outflows. The decline in Ethereum network fees from January to April has also contributed to reduced enthusiasm, affecting net staking yields and overall demand for ETH.

In the options markets, put options are trading at similar levels to call options, indicating a neutral sentiment. However, Ether could regain market attention following US President Donald Trump's reversal on certain altcoins. Trump's decision to sever ties with a lobbyist who proposed a strategic crypto reserve, despite earlier endorsements of competing altcoins like Solana, Cardano, and XRP, could potentially impact investor sentiment.

Despite the lack of enthusiasm in the derivatives market and spot ETF flows, a potential rally towards the $2,700 level remains plausible. The failed lobbying efforts by Ethereum's competitors may prompt a shift in investor sentiment and draw attention back to Ether.

Overall, while the recent surge in ETH price has been significant, the market remains cautious and uncertain about the future trajectory of Ethereum. Investors will closely monitor developments in both the derivatives market and external factors, such as regulatory decisions and market sentiments, to

Source: https://cointelegraph.com/news/ethereum-price-greenlit-for-further-upside-after-surprise-29-eth-rally?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound