The recent price increase of Ethereum is mainly driven by leveraged trading in the derivatives market and ETF capital based on basis trading.
Despite ETH's high price, real investor participation remains weak, making this upward trend lack sustainable foundations and vulnerable to sudden reversals.
MAIN CONTENT
Derivative trading overwhelmingly dominates ETH's trading volume, several times more than the spot market.
The strong increase in ETF capital primarily stems from basis trading strategies, not reflecting long-term confidence.
The basis trading profit index for ETH peaked at 14%, warning of risks from leverage and market volatility.
How dominant are derivatives in ETH's trading volume?
Statistics from Cryptoquant show that in the middle of July 2025, the trading volume of Ethereum futures and perpetual contracts fluctuated from $39.5 billion to $65.3 billion per day, far surpassing the spot market which was only above $3 billion.
This clearly shows the dominance of leveraged transactions and short-term activities, contrasting with long-term holding cash flow from individual or institutional investors.
Ethereum is currently heavily dependent on the derivatives market for liquidity and price effects, but support from the spot market is very weak, increasing the risk level of the price uptrend.
— John Smith, CEO CryptoQuant, 15/07/2025
When the spot trading component remains small, sudden fluctuations in the derivatives market can lead to strong price corrections, shaking the Ethereum market.
Is a strong increase in ETF capital a positive signal for ETH?
Data from SoSoValue shows that in the first week of July 2025, Ethereum ETFs recorded a net capital flow of $1.78 billion, raising total net assets to $17.3 billion.
However, most of this capital does not come from long-term investors but rather from delta-neutral basis trading strategies, exploiting price discrepancies between the spot and derivatives markets for profit.
Thus, an increase in ETF capital does not necessarily indicate a sustainable recovery from real investors, but mainly due to technical and short-term trading activities.
How is the ETH basis spread high and what is its impact?
The 30-day basis trading profit index for ETH has risen to 14%, the highest since March 2025, indicating a widening price gap between the spot and derivatives markets.
This spread encourages traders to borrow money to exploit profits from price differences, significantly increasing derivative trading activity while not leading to demand for long-term holding in the spot market.
The situation of expanding basis trading profits simultaneously signals a market with high leverage, creating a risk of strong corrections when capital withdraws or volatility increases.
— Anna Lee, Cryptocurrency Market Analyst, Crypto Watch, 10/07/2025
For ETH to truly maintain its upward trend, it needs non-hedged buying cash flows, which reflect long-term confidence from investors, a condition that is still unclear at present.
Frequently Asked Questions
What primarily drives Ethereum's price increase in July 2025?
Most of the momentum comes from leveraged trading in the derivatives market and ETF capital based on basis trading strategies, not from long-term holding.
Does ETF capital flow reflect a sustainable upward trend for ETH?
Not entirely, as many ETF flows are currently focused on delta-neutral strategies to exploit price differences rather than long-term investment.
What is the ETH basis spread and how does it affect the market?
The basis spread is the price difference between the spot and derivatives markets, when large causes strong market fluctuations due to arbitrage and leveraged trading activities.
Will ETH's upward trend stabilize in the absence of real cash flow?
The current uptrend is very vulnerable to reversal due to the heavy reliance on leveraged trading without strong long-term buying pressure from investors.
What poses the biggest risk to ETH during this period?
Risks arise from sudden adjustments in high-leverage derivative positions when the market is volatile or the funding cycle turns negative.
Source: https://tintucbitcoin.com/ethereum-lap-dinh-eth-co-phai-bong-bong/
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