Analysis: Ethereum's Rally Driven by Short Covering Rather Than Bullish Sentiment

According to CoinDesk, CF Benchmarks CEO Sui Chung analyzed that the recent price rebound of Ethereum is mainly driven by short covering rather than new bullish bets in the market. Although the price of ETH has risen nearly 90% since early April, breaking through $2,600, the one-month annualized premium of CME Ethereum futures remains in the low range of 6% to 10%, failing to increase with the price rise.

Chung emphasized: "In a more conventional market environment, if traders establish new long positions with leverage, we would expect to see an increase in the futures basis level. This reminds us that not all rallies are driven by new demand; sometimes they reflect market repositioning and risk adjustment."

The lackluster inflow of funds into U.S.-listed spot Ethereum ETFs further supports this view, with net inflows occurring on only ten trading days in the past four weeks, and only once exceeding $100 million. These market indicators collectively indicate that the current rise in Ethereum prices lacks strong support from new demand and institutional investors.