Ethereum Surges 40% in Two Weeks, Driven by Spot Market Demand

Ethereum (ETH) has experienced a significant surge in value, with its price increasing by over 40% in just two weeks. Currently, ETH is trading around $2,555, marking a notable recovery after a period of underperformance compared to other major cryptocurrencies. This rally is particularly noteworthy because it appears to be driven by genuine spot market demand rather than leveraged trading, which is a positive indicator for sustainable growth.

According to analysts, the funding rates for ETH have remained relatively flat despite the price surge. This is a crucial indicator because funding rates typically reflect sentiment in the perpetual futures market. Flat funding rates during a rally suggest that the upward price action is coming from genuine buying in the spot market rather than speculative leverage. This dynamic makes the uptrend less vulnerable to sudden reversals triggered by mass liquidations, which are common in highly leveraged markets.

A key development supporting Ethereum’s momentum is the return to profitability for ETH stakers. For the first time since March, staked ETH is showing unrealized gains. On May 9, ETH crossed the $2,297 mark, surpassing the realized price and flipping stakers back into profit territory after more than two months of being underwater. This recovery strengthens Ethereum’s network stability by reassuring validators and staking participants, potentially signaling a larger bullish shift across the Ethereum ecosystem.

Ethereum continues to dominate as the largest on-chain economy, with over $213.9 billion in Total Value Locked (TVL) across lending, staking, and other sectors. This extensive activity demonstrates Ethereum’s unmatched developer base and DeFi infrastructure, which attracts the highest volume of application deployment and usage. However, Ethereum’s dominance isn’t without challenges. Incentives tied to scalability and application success create a real threat of app migration, especially to competing chains. Ethereum’s leadership has acknowledged these graduation risks and is reportedly working toward strategies that ensure value retention as applications evolve and expand.

From a technical perspective, ETH’s recent breakout pushed it above $2,550, marking a strong bullish continuation. The Relative Strength Index (RSI) was at 80.58, indicating strong momentum but suggesting the asset may be entering overbought territory. Meanwhile, the Moving Average Convergence Divergence (MACD) showed a widening gap between the MACD and signal lines, a bullish signal reflecting increased buying pressure. Several analysts remain optimistic about Ethereum’s future price movement. One analyst remarked that if ETH can decisively break through the $2,380 resistance level, then it could enter a new bull rally. Another analyst noted that ETH is following a V-shape recovery, comparing BTC and ETH price action and predicting that ETH is likely to follow BTC’s trajectory.

While Ethereum remains below its all-time high of $4,878 reached in November 2021, with volume holding steady and sentiment turning optimistic following the staking profit recovery, Ethereum’s price may test higher resistances in the coming weeks. However, the current overbought conditions could lead to a brief consolidation before the next leg up in price.