Ether is rallying hard, but don’t pop the champagne just yet. The real reason behind $ETH surge might surprise you — it’s not new money flooding in, it’s the bears throwing in the towel.
Sui Chung, CEO of CF Benchmarks (the firm behind key crypto pricing indices), says the recent ETH pump is mostly short covering — not fresh bullish bets.
Wait, What’s Short Covering Again?
Think of it like this: traders who bet against ETH (aka short sellers) are now scrambling to buy back as $ETH the price rises. That buying pressure pushes ETH even higher, but it’s more about damage control than optimism.
Institutions often trade ETH through CME futures, and if they were turning bullish, we’d expect to see a rise in what’s called the futures premium (aka “basis”). But nope — the basis has stayed low, hovering between 6% and 10% annualized, even after ETH surged nearly 90% to over $2,600.
That means institutions aren't piling in with new long positions — they’re just getting out of losing short trades.
What About the ETFs?
Another sign? The new U.S.-listed spot ETH ETFs aren’t seeing major inflows either. According to SosoValue, positive inflows only happened on 10 out of the past 20 trading days, and only once did they exceed $100 million.
is pumping, but it's not fresh demand.
Bears are buying back in — that’s what's pushing prices up.
Institutional futures and ETFs aren't showing strong bullish signs (yet).
Be cautious — not all rallies mean the bulls are in control.
