Author: Chen Ming, Securities China
Crypto, collective movement!
In recent days, crypto prices have surged significantly. Among them, ETH showed the strongest performance, rising over 40% within 72 hours, with prices briefly approaching $2,600. Additionally, Bitcoin, XRP, BNB, Solana, Dogecoin, and Cardano also saw impressive gains.
Some analysts point out that the recent collective rise in crypto is related to the easing of trade tensions. The leading performance of ETH is linked to its ongoing technical upgrades.
ETH Rises Over 40% in Three Days
In the past three days, ETH experienced significant movement, with prices soaring from $1,811 to $2,597.68, reaching a maximum gain of 43%, significantly outperforming other major digital currency assets like Bitcoin.
At the time of writing, ETH was fluctuating around $2,540, with a 7-day cumulative gain of 39.62%; Bitcoin was hovering near $104,000, with a 7-day increase of 8.52%. Over the past 7 days, Solana rose over 21%, BNB increased over 10%, Cardano gained over 15%, and Dogecoin surged over 37%.
These figures show that ETH led the broad crypto rally, potentially achieving its largest weekly gain since 2021, boosted by easing global trade tensions and optimism about network upgrades.
ETH's rebound reflects investors' renewed focus on its ongoing technical upgrades. On May 7th, ETH successfully implemented the Pectra upgrade, introducing key technical improvements. The upgrade included important enhancements like higher staking limits and account abstraction (EIP-7702 standard), significantly improving the network's usability and flexibility, and potentially reducing network fees. This technical upgrade not only brought substantial functional improvements but also injected new confidence in investors, serving as a crucial technical foundation for this rally. These measures are seen as necessary to compete against fast-growing competitors like Solana.
Additionally, a "short squeeze" helped boost ETH's rebound. From May 8th, the ETH futures market experienced a typical short squeeze. Data shows that since May 8th, short positions in the ETH futures market underwent massive liquidation, with clearance amounts reaching $438 million, far exceeding the long liquidation of $211 million. The sharp price increase forced short traders to buy ETH to cover positions, further driving up prices in a typical short squeeze spiral.
Simultaneously, ETH's total open interest increased from $21.28 billion on May 8th to $26.77 billion on May 10th, with the weekly funding rate for ETH perpetual futures rising from 0.10% to 0.15%. These indicators suggest more traders are entering the market, opening new positions, and long traders are willing to pay additional fees to maintain positions, further confirming bullish sentiment in ETH futures trading.
Easing Trade Tensions
From a macro perspective, the easing of global trade tensions is a crucial reason for the recent crypto rally. According to CCTV News, on May 8th, the US and UK reached a new trade agreement, partially withdrawing tariffs in specific areas and further expanding market access for both sides' products. Additionally, high-level economic and trade talks between China and the US began in Geneva, Switzerland on the morning of May 10th.
These news significantly boosted market risk appetite and created a positive atmosphere for crypto assets, including Bitcoin and ETH. On May 8th, Bitcoin broke through the $100,000 mark for the first time since February this year. Analysts suggest this reflects a recovering investor demand for risk assets, coinciding with the continued rebound of US stocks from April's lows, indicating a clear increase in market risk appetite.
Nexo co-founder Trenchev stated: "Bitcoin's Thursday movement not only marked its first return to $100,000 in three months but also reaffirmed its status as the 'ultimate rebound asset', reflecting the market sentiment boost from improved US trade prospects." He added that Bitcoin is supported by the Trump administration's crypto-friendly attitude and continued buying by spot ETF investors. He further noted that recent market uncertainty has actually propelled Bitcoin's rise, as investors begin to doubt the US dollar's safe-haven status, which may continue to support Bitcoin's trend.
Kraken's global economist Thomas Perfumo noted: "Bitcoin's return to six-digit territory coincides with a global market risk sentiment recovery. The stock market is performing strongly, and investors' willingness to allocate risk assets is increasing, with this 'animal spirit' of recovery quickly spreading to the crypto domain."
Another significant event in the crypto world recently was Coinbase's $2.9 billion acquisition of Deribit.
According to foreign media reports this Thursday, US crypto exchange Coinbase has agreed to acquire the world's largest crypto derivatives exchange Deribit for $2.9 billion, marking the largest merger in digital market history. The transaction structure shows Coinbase will pay $700 million in cash, with the remainder in stock. Coinbase stated that this acquisition will accelerate its global derivatives strategy.
This acquisition marks Coinbase's most ambitious move into the lucrative crypto derivatives market. Last year, Deribit's total trading volume nearly doubled to nearly $1.2 trillion. Cantor analyst Brett Knoblauch stated: "This is the largest crypto acquisition in history, and we believe it's an A+ acquisition for Coinbase."
