Ethereum (ETH) surprised the market with a 29% price surge between May 8 and May 9, shaking off nearly ten weeks of bearish consolidation. The sudden move, which took ETH to $2,330, marked the asset’s strongest single-day rally since May 2021. Yet, despite the bullish price action, data suggests broader investor sentiment remains cautious.
According to CoinGlass data, the rally triggered more than $400 million in short liquidations. The sharp climb came after ETH bottomed out at $1,385 on Apr. 9. On-chain metrics and institutional flows point to crypto-native spot investors as the key drivers behind the recent pump.
Spot buyers lead while derivatives lag
The most recent Ethereum (ETH) price breakout came without an uptick in leveraged derivatives activity. Futures funding rates remained neutral at 0.01%, and the three-month ETH futures premium on Laevitas stayed under 5%—a threshold generally associated with bullish conviction.
Deribit’s 30-day options delta skew also remained flat, suggesting traders placed equal weight on upside and downside risk. That neutrality echoed across sentiment indicators, showing muted enthusiasm despite ETH’s best day in four years.
Lookonchain flagged large institutional inflows, including a 138,511 ETH withdrawal by Abraxas Capital from Binance and Kraken. Meanwhile, Ethereum’s exchange reserve dropped by 180,000 ETH in 24 hours, contributing to a two-week net drawdown of 450,000 ETH.
ETF flows still in decline despite rally
Ethereum’s rally has failed to reignite interest in U.S.-listed spot ETFs. According to Farside Investors, May 8 recorded $16 million in net outflows, extending the trend to a third consecutive day. SoSoValue data echoed the trend, showing steady withdrawals despite ETH’s 21.8% jump on Thursday.
This weak institutional demand underscores the divide between crypto-native buyers and traditional finance. Even with the Pectra upgrade and a broader uptick in altcoins, ETF investors remain cautious.
Source: CryptoVirtuos/X
“ETH’s recent price surge wasn’t ETF-driven,” said CryptoVirtuos in a May 9 post on X. “Spot investors sparked it.”
Network fundamentals show mixed signals
While price action captured headlines, Ethereum’s network activity told a more nuanced story. Santiment data showed a spike in active addresses, jumping from 458,000 to 563,000 in one day. Meanwhile, ETH’s weighted sentiment rose to 5.2—the highest since May 2024.
However, network fees have dropped 85% since January, cutting into the ETH burn rate and dampening staking yields. The slump in on-chain activity reflects weaker user demand, despite optimism around scalability and staking improvements introduced in the Pectra upgrade.
Ethereum currently holds $64 billion in total value locked (TVL), maintaining its lead over Solana, BNB Chain, and Tron combined. However, its 2025 underperformance—lagging altcoin market cap by 17%—still weighs on investor confidence.
Trump’s pivot adds political twist to ETH narrative
The recent price action followed a subtle but potentially pivotal political development. On May 8, Politico reported that U.S. President Donald Trump had reversed his earlier stance on certain altcoins. Trump allegedly cut ties with a crypto lobbyist who proposed creating a national digital asset reserve.
While Trump’s Mar. 2 social media post spotlighted Solana, Cardano, and XRP, his subsequent “Digital Asset Stockpile” Executive Order toned down the rhetoric. That shift, coming amid ETH’s breakout, fueled speculation about Ethereum regaining political favor.
Source: Ted Pillows
Crypto analyst and trader, Ted Pillows suggested the rally was “just a start,” forecasting $12,000 ETH in 2025. Citing institutional adoption, token burn acceleration post-Pectra, and a “risk-on” macro environment, he argued Ethereum remained undervalued.
Andrew called the move “the most hated rally ever in crypto history,” alluding to skepticism among traders.
Despite the 29% surge, ETH has yet to flip critical resistance levels near $2,500 and $2,850. The lack of conviction in derivatives, muted ETF flows, and declining network fees could limit follow-through.
Still, the spot-driven rally and growing on-chain activity suggest the market may be in the early phase of a shift. If broader sentiment catches up—and ETF flows stabilize—Ethereum could test the $2,700 zone.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
Moses K is a crypto journalist covering markets, regulation, and blockchain trends. He has written for The Coin Republic, Coinchapter, Cryptopolitan, Cryptotale, Coinspeaker, and MPost. Known for his concise, data-driven reporting, Moses focuses on price analysis, on-chain metrics, and policy developments shaping the global digital asset landscape.
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