TLDR

• ETH jumped over 20%, reclaiming the $2,000 level following the US-UK trade agreement announcement
• The price surge coincided with the successful Pectra upgrade implementation on May 7
• On-chain data shows increased buying pressure with exchange reserves dropping by 323,000 ETH since April 24
• Open Interest in ETH derivatives spiked 21%, reaching 12.08 million ETH ($25.04 billion)
• Short positions worth approximately $328 million were liquidated during the rally

Ethereum has seen a dramatic price recovery in the past 24 hours, with ETH surging 20% to reach $2,230. This strong upward movement came after President Trump announced a “full and comprehensive” trade agreement between the US and UK, and following the successful implementation of the Pectra upgrade.

The US-UK trade deal involves a reduced baseline tariff of 10%, with aluminum and steel exempted from levies. President Trump also mentioned that negotiations with many other countries are in advanced stages.

This news provided relief to global markets that had been under pressure from trade war tensions in Q1. Ethereum, which had declined during this period, has been recovering since late April.

The Pectra upgrade, which went live on May 7, brought new wallet features, increased staking limits, and scalability improvements to the Ethereum network. Developers are now focusing on the next upgrade called Fusaka, planned for release by the end of 2025.

On-chain data reveals strong institutional interest in Ethereum. Digital asset investment firm Abraxas Capital purchased 49,644 ETH using Binance and Kraken platforms, according to data from on-chain tracker Lookonchain.

Ethereum ETH Price
 

Market Indicators Show Bullish Momentum

Exchange reserves for Ethereum have decreased by 132,000 ETH in just four days, extending the total decline to 323,000 ETH since April 24. This reduction in exchange reserves typically indicates rising buying pressure as investors move their assets off exchanges for longer-term holding.

In the derivatives market, Ethereum’s open interest surged to 12.08 million ETH (approximately $25.04 billion), according to Coinglass data. The price spike caught many traders off guard, resulting in around $328 million in short positions being liquidated.

The rally saw $188.04 million in futures liquidations within 24 hours. Of this amount, $21.29 million were long positions and $166.75 million were short positions.

Technical indicators have turned bullish. The Relative Strength Index and Stochastic Oscillator have both entered overbought territory, signaling strong bullish momentum, though also suggesting the possibility of a short-term correction.

Ethereum’s price movement has closely followed Bitcoin, which crossed the $100,000 mark for the first time since February 7. The S&P 500 and Nasdaq-100 also gained over 1% on Thursday, highlighting the growing correlation between crypto markets and traditional financial markets.

Crypto trader Alex Kruger attributed Ethereum’s price spike primarily to “new longs.” If Ethereum were to fall back to $2,000, approximately $2.06 billion in long positions would be at risk of liquidation.

This move on $BTC since upper 99ks largely driven by shorts getting liquidated or closing. $ETH is different, that's mainly new longs. pic.twitter.com/Ilb1eFJCrE

— Alex Krüger (@krugermacro) May 8, 2025

The positive momentum comes after a challenging start to 2025 for Ethereum. The cryptocurrency had fallen 56% from its January 1 price to $1,472 by April 9, its lowest point this year.

2025’s second quarter could be promising for Ethereum investors. Historically, ETH has averaged a 62.2% return in Q2 since 2013. Based on its price on April 1, Ethereum could potentially reach around $2,950 by the end of June if this pattern continues.

Despite the rally in spot prices, Ethereum ETFs have not yet seen positive flows. For the third consecutive day, spot Ethereum ETFs recorded outflows on May 8, totaling $16.1 million according to Farside data.

The Ethereum Foundation recently awarded $32.64 million in grants to various ecosystem projects in Q1 2025. These funded projects aim to improve Ethereum in key areas including community education, consensus layer, cryptography, developer experience, and protocol growth.

If Ethereum maintains its momentum and reclaims the key range between $2,100 and $2,250 (strengthened by the 100-day Simple Moving Average), it could potentially rally toward the $2,550 resistance level.

A move above this resistance could mark the beginning of a major recovery phase for the second-largest cryptocurrency by market capitalization.

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