Ethereum has surged over 20% in the past week, breaking through $3,600 for the first time in months. But is this upward momentum driven by genuine investor demand or short-term speculative activity?
Data suggests that the recent rally is largely fueled by the derivatives market, with Ethereum Futures Market leading the way. On-chain analytics firm CryptoQuant found that leverage-heavy futures positions are responsible for the price gains, rather than sustained buying in the spot market.
This has raised questions about the durability of the current rally and whether follow-through demand from spot buyers will emerge. Another analyst, Avocado, highlighted an overheated state in specific zones of the Ethereum Futures Volume Bubble Map, which coincided with ETH’s price gains. The spot market data shows relative stability, with no equivalent spike in volume.
Institutional interest is also growing, with increasing signs of participation from whales on Coinbase and capital inflows into Ethereum-focused spot ETFs reaching record highs. While current metrics do not indicate overheating, investors should remain aware of potential risks if the strong upward activity repeats.
The combination of rising institutional demand and growing ETF allocations may provide structural support for Ethereum, especially if the spot market begins to reinforce the momentum sparked in the futures space.
Source: https://www.tradingview.com/news/newsbtc:fa1a81205094b:0-ethereum-s-rally-isn-t-what-it-seems-here-s-what-s-really-driving-it