Ethereum surges 29%, is this the end of the bear market or a short-term rebound? Market confidence remains to be seen

After a ten-week downtrend, Ethereum (ETH) rebounded strongly on May 8-9, with a 29% surge in price from a low of $1,385 on April 9 to over $1,800. This unexpected rally not only triggered more than $400 million in ETH futures short liquidations, but also shocked many whales and market makers, catching the market off guard.

Market sentiment remains cautious, and traders are neutral

Despite the strong recovery in ETH prices, traders in the derivatives market remain cautious. So far, the Ethereum futures premium has failed to break the neutral threshold of 5%, indicating that the market's demand for leveraged longs is still limited. In addition, ETH has underperformed the overall altcoin market since 2025, lagging by 17% year-to-date, which also explains why investor confidence is still insufficient.

Analysts are divided on this round of gains: some believe that this may be a short-covering market, while others point out that Ethereum's fundamentals have not improved significantly, so it is difficult to judge whether this is the beginning of a trend reversal.

Infrastructure is steadily advancing, and Ethereum still has core advantages

Despite weak market sentiment, Ethereum's position in decentralization and network security remains solid. Recent network upgrades have significantly improved the scalability of the second layer, further strengthening its position as the preferred blockchain platform. Currently, Ethereum's total locked value (TVL) is as high as $64 billion, far exceeding its three major competitors - Solana, BNB Chain and Tron - the total of which is only $22.3 billion.

ETF outflows continue, and the decline in on-chain activity affects market enthusiasm

However, the lack of market enthusiasm is also reflected in other aspects. According to Farside Investors, even though Ethereum recorded its strongest single-day performance in four years, its spot ETF still saw net outflows for the third consecutive day, with an outflow of $16 million on May 8 alone.

The decline in on-chain activity is also a warning sign. Since January, Ethereum network transaction fees have plummeted by 85%, a change that weakens ETH's role as a "fuel coin", reduces its demand, and also compresses the space for staking income. As an important driving factor of Ethereum's destruction mechanism, the reduction in trading volume also indirectly weakened ETH's deflationary properties.

The derivatives market signals are vague, and political changes may bring about a turnaround

In the ETH options market, the current call and put options are equal, reflecting that investors are still waiting and watching the future trend. Nevertheless, the latest developments at the political level may become an external catalyst affecting market sentiment.

According to Politico, US President Trump recently distanced himself from lobbyists who proposed the concept of crypto asset reserves and showed a wavering support for certain altcoins. He had previously mentioned Solana (SOL), Cardano (ADA) and XRP on social media, but his tone was greatly restrained in subsequent executive orders. This change may provide room for Ethereum to regain policy attention.

Looking to the future: $2,700 is still expected?

Although Ethereum is still facing the challenges of ETF fund outflows and low sentiment in the derivatives market, from a fundamental and technical perspective, ETH has not lost its long-term value. If market sentiment changes due to the failure of the competition currency lobbying, Ethereum is expected to rebound and return to the $2,700 area.