-The increase in Ethereum is attributed to short covering, according to the data.

The latest data shows that the price of Ethereum jumped from $2,200 in mid-April to $2,600 in May 2025, marked by the closing of short positions by traders. "The recent surge in ETH's price is primarily due to short position covering rather than new demand or new long positions."

The recent increase in Ethereum lacks the characteristics of a true breakout, such as high gas fees, indicating limited demand from the ecosystem. Additionally, futures premiums remain lower than in previous rallies, indicating a cautious institutional stance.

The rise in Ethereum prices has had a significant impact on traders and markets, but many remain skeptical about sustainability. Without an increase in institutional investment, it may be difficult to maintain market momentum.

Financial analysts observe the need for new ETF inflows and leveraged futures purchases to support this rally. Long-term sustainability depends on a shift in institutional behavior towards greater exposure.

Possible outcomes of Ethereum's price movement include volatility in market sentiment, adjusting investors' strategies. Historical trends imply that without fundamental demand, the sustainability of the rally is uncertain. Expert analyses indicate cautious optimism and the need for solid institutional backing.