The recent surge in Ethereum's price may seem sudden, but it is actually the inevitable result of multiple forces converging.

First, let's look at the capital side. Since the approval of the US spot ETH ETF, institutional entry has exceeded expectations. Starting from July 2025, weekly net inflows have surpassed $1.5 billion, with major products like BlackRock's ETHA continuing to attract funds. Meanwhile, listed companies and whales are also increasing their holdings, with staking annualized yields maintained at 3%-3.5%, enough to attract long-term capital. This has led to further locking of circulating supply, highlighting scarcity.

The technical changes are equally significant. The Cancun upgrade (Dencun) greatly reduced data costs for Layer 2 solutions. Daily transaction volumes on Layer 2 networks like Arbitrum and Optimism have already far surpassed the mainnet. Additionally, the EIP-1559 burning mechanism combined with staking lock-up has significantly lowered Ethereum's inflation rate. Coupled with the tokenization of RWA and the growth of DeFi TVL, the actual demand for ETH continues to strengthen.

A key supply-demand reversal has occurred in the staking market. Total staked ETH has surpassed 35.5 million, accounting for 28.91% of circulating supply. More importantly, the amount of ETH waiting to be staked is 15 times the amount wanting to exit, indicating that selling pressure has been essentially eliminated and strong support has formed on the supply side.

On the macro level, the outlook is also shifting. Expectations of global liquidity easing are heating up, and risk asset preferences are clearly increasing. The US's attitude towards crypto regulation is also softening, with the progress of relevant legislation reducing regulatory uncertainty and attracting traditional funds.

Finally, actions in the futures market are also fueling the rally. Large-scale short positions are being closed, triggering liquidations and pushing prices higher. Coupled with the spillover effect from Bitcoin ETF inflows, the sector-wide rally is forming a self-reinforcing cycle. The convergence of multiple factors has led to the current upward trend we are witnessing.