The rally was backed by a sharp rise in trading activity, especially in the derivatives market, whose volume jumped 184%, as per Coinglass data. Open interest in Ethereum eth19.83%Ethereum futures has climbed 20% in the past 24 hours, signaling a wave of fresh capital entering the market.

Rising open interest alongside price usually points to the start of a new trend, as traders build long positions rather than simply covering shorts. Meanwhile, more than $265 million in short positions were liquidated, adding fuel to the upward momentum.

Even though Ethereum has risen 54% in the last month, it’s down 26% so far this year, but there’s still potential for a recovery if momentum continues. 

The rally coincides with the ongoing decline in the ETH/BTC Market Value to Realized Value ratio. On a May 8 post on X, analysts at CryptoQuant noted that, based on this ratio, Ethereum is now at its most undervalued level relative to Bitcoin btc3.38%Bitcoin since 2019. 

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