ETH price rallies by 22% on May 8, but demand for spot ETH ETFs and derivatives remains muted.

ETH price rallied by 22% on May 8, but demand for spot ETH ETFs and derivatives remains muted.

The price of Ether (ETH) surged by 22% on Monday, hitting a four-year high as President Donald Trump's reversal on certain altcoins coincided with the token's upbeat outlook.

According to data from Benzinga, the third-largest cryptocurrency rallied to a high of $2,602 by 07:30 ET (11:30 GMT) on Monday, marking a 29% surge over the previous 48 hours.

This sharp price move ultimately triggered the liquidation of over $400 million in short (sell) ETH futures positions, catching whales and market makers off guard.

Despite the significant price increase, traders remained neutral on Ether derivatives, and there was minimal demand for spot Ether exchange-traded funds (ETFs), which could be a key warning sign.

The enthusiasm for Ether seemed muted even after it experienced its strongest single-day price performance in four years. According to data from Farside Investors, U.S.-listed Ether spot ETFs experienced net outflows for a third consecutive day on Monday, with a total of $16 million in net outflows.

The lack of interest from traders in the world’s second-largest cryptocurrency despite its recent bullish momentum can be attributed in part to the sharp 85% drop in Ethereum network fees from January to April, as reported by CCData.

The reduced activity levels lower overall demand for ETH and have a negative impact on net staking yields. This is because the protocol’s burn mechanism, which is designed to reduce the token’s supply and potentially increase its price, relies on competition for data processing, which in turn generates the gas fees that are used to burn the tokens.

Furthermore, the options markets offer valuable insights into whether whales and market makers anticipate further downside risks.

The put (sell) options are currently trading at similar levels to the equivalent call (buy) options, which indicates a neutral market sentiment. This outcome is somewhat discouraging for Ether bulls.

However, the cryptocurrency could regain attention following reports that President Trump had reversed his position on certain cryptocurrencies following earlier public endorsements of competing tokens.

According to a Politico report published on Monday, President Trump felt he had been "used" and severed ties with the lobbyist who reportedly proposed the idea of a strategic crypto reserve.

While Trump's social media post on March 2 specifically mentioned Solana (SOL), Cardano (ADA), and XRP, the subsequent March 6 "Digital Asset Stockpile" Executive Order struck a more reserved tone.