Analysis: The rise of Ethereum is due to short covering rather than bullish sentiment

ChainCatcher news, according to CoinDesk, CF Benchmarks CEO Sui Chung analyzed that the recent price rebound of Ethereum is primarily driven by short covering rather than new bullish bets in the market. Although the ETH price has risen nearly 90% since early April, breaking above $2,600, the one-month annualized premium for CME Ethereum futures remains low, ranging from 6% to 10%, failing to increase alongside 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 weak inflow of funds into the U.S.-listed spot Ethereum ETF further supports this view, with only ten trading days showing net inflows over the past four weeks, and only once exceeding $100 million. These market indicators collectively suggest that the current rise in Ethereum prices lacks new demand and strong support from institutional investors.