Ethereum’s rally in the second quarter of 2025 has slowed down, even as institutional demand remains strong. While ETH exchange-traded funds (ETFs) have recorded impressive inflows, traders in the futures market appear hesitant to back the current price levels. This contrast raises questions about the sustainability of ETH’s recent gains and whether another correction could be around the corner.
Institutional Demand Fuels ETF Inflows
Ethereum began Q2 with strong momentum, doubling in price from $1,400 to $2,800 between April and May. This growth was largely driven by institutional buying, particularly after the approval of spot ETH ETFs in the U.S. According to data from SoSoValue, May saw net inflows of $564 million into these products.
June continued the trend, with ETH ETF inflows crossing the $1 billion mark with just a few trading days left in the month. In the last week alone, ETFs saw another $232 million in net capital inflow — an indication that institutional interest has not faded.
Futures Market Pulls Back Despite ETF Optimism
Despite this wave of capital, speculative appetite in the futures market has weakened. Ethereum’s open interest — a key metric that measures the total value of outstanding futures contracts — fell by $10 billion over the past two weeks. After peaking at $41 billion during the May rally, open interest has dropped to $31 billion, signaling a significant decrease in leveraged positioning.
This decline coincided with Ethereum’s drop from its recent high of $2,800 to a low of $2,100. While ETH has since rebounded to around $2,400, the muted response from futures traders suggests lingering uncertainty about the asset’s near-term direction.
Options Market Signals Short-Term Optimism, Mid-Term Doubt
The options market offers a more nuanced view. Earlier this week, the 25 Delta Skew — which compares demand for call options versus put options — climbed to 6% and 15% for the 1-week and 1-month tenors respectively. This indicated a surge in short-term bullish sentiment and explained the relief rally from $2,100 to $2,500.
However, that optimism has faded. As of writing, skew levels for 1-week and 1-month contracts have dropped to just 1% and 3%. Even more notably, the 3-month skew turned negative, falling to -2%, a sign that traders expect more downside heading into Q3. This shift points to a broader mid-term skepticism that could weigh on price momentum if current trends continue.
Historical Indicators Suggest ETH May Be in a Buy Zone
Despite the conflicting signals, one on-chain metric suggests Ethereum might still be offering a strong buying opportunity. The Spent Output Profit Ratio (SOPR) — a measure of whether coins are being sold at a profit or loss — is currently sitting at a neutral value of 1.0.
Historically, SOPR readings above 1.06 have aligned with local tops, while readings below 1.0 have marked attractive buying levels. With SOPR hovering near 1, a slight pullback could push ETH into oversold territory, presenting another entry point for long-term investors.
ETF Flows vs. Market Sentiment: What It Means for Traders
The divergence between ETF inflows and futures market sentiment presents a tricky landscape for traders. On one hand, institutional money continues to pour in, which is typically a bullish sign and reflects long-term conviction. On the other, short-term players in the derivatives space are showing signs of exhaustion, suggesting that the rally may be losing steam — at least temporarily.
If open interest continues to fall and options skew stays negative for longer timeframes, ETH could face further price consolidation or even a decline. However, if ETF inflows maintain momentum and on-chain data improves, Ethereum may find support and stage another upward move heading into Q3.
Final Thoughts
Ethereum’s current market dynamics reflect a classic disconnect between long-term investment flows and short-term trader behavior. While ETFs are driving fresh capital into ETH, the futures and options markets are cautioning against expecting a smooth ride.
With SOPR hovering near a historical support level and ETF interest at record highs, Ethereum may be on the verge of setting up a new base — but caution is warranted. Whether the next move is a breakout or another correction will likely depend on how market sentiment shifts in early Q3.
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