Ethereum’s price has recently rebounded, climbing over 8% in the past week and nearly 5% in a single day. This short-term rally contrasts sharply with persistent weak market indicators, including significant outflows from Ethereum spot ETFs that point to ongoing bearish investor sentiment.

Despite the recent price gains, Ethereum lost critical support levels earlier this year, falling below $3,200 and then $2,000. Currently trading near $1,550, the cryptocurrency finds some technical backing at an extreme low pricing band known as the -1.0σ level, which is a standard deviation below the all-time mean used to identify potential support zones.

Data shows that aggressive buyers have emerged recently in perpetual swap markets, where the taker buy-sell ratio and its 7-day average both moved above 1. This suggests that the recent upswing was driven partly by buyers betting on a price rebound, possibly triggering a short squeeze as traders covering short positions push prices higher.

Open Interest—a measure of total outstanding derivatives contracts—has also increased slightly, supporting the idea of growing speculative activity. However, should Open Interest decline again, it would indicate the rally might be due more to shorts closing their trades rather than genuine buying demand, casting doubt on the sustainability of the move.

The technical indicator TD Sequential has indicated a rare monthly buy signal at the start of this month. Historically, when this signal appeared on Ethereum’s monthly chart in September 2022 and March 2025, the asset experienced substantial rallies exceeding 180%. Still, broader market dynamics, especially the negative ETF flows since mid-June totaling hundreds of millions in outflows, suggest the overall investor conviction remains fragile.

This contrast between recent bullish technical signals and unfavorable fund flows leaves Ethereum’s longer-term trajectory uncertain. While short-term buying momentum and potential short squeezes could drive prices temporarily higher, the undercurrents of weak spot ETF demand and loss of key price supports mean investors should remain cautious.