ETH Price Surge: Short Covering Fuels Rally, Inflows Remain Weak

16 May, 2025, 01:29 PM

The recent Ethereum (ETH) price surge is primarily attributed to short covering by futures traders, rather than substantial new capital entering the market. Sui Chung, CEO of CF Benchmarks, highlighted this trend, noting that the CME futures premium for ETH remains subdued. This suggests the rally isn't fueled by fresh long positions or heightened institutional appetite. Chung pointed out that US ETH spot ETFs have experienced net inflows on only a handful of days recently, with only one day exceeding $100 million. This indicates a lack of significant organic buying pressure. While positive price movement is always welcomed, the reliance on short covering for upward momentum can be unsustainable in the long term. A healthy and sustained rally typically requires consistent inflows and genuine demand, factors that currently appear limited in the ETH market. Further developments with ETH ETFs and institutional adoption will be key to future price performance. ```