ETH short-term rally of 1.03%: On-chain activity increases combined with short covering driving the price higher

Between 22:00 and 23:00 (UTC) on May 3, 2026, the ETH price return was +1.03%, with a price range of 2323.99 to 2351.69 USDT, and an amplitude of 1.19%. During this period, network interaction activity significantly increased, with on-chain active addresses and transaction counts both reaching intraday highs, causing a short-term upward price movement.

The main driver of this fluctuation was a sharp increase in on-chain activity. Data shows that during this hour, active addresses reached 19,531, transaction counts totaled 96,252, and Gas usage rose to 218,122,356,146, indicating a notable boost in network interaction activity. Spot buying pressure also increased accordingly, directly pushing the price higher.

Secondly, short covering in the derivatives market created a feedback effect. Since early 2026, the ETH/USDT perpetual contract funding rate has repeatedly turned negative, indicating a generally bearish market. When spot buying drives prices up, short sellers are forced to close their positions, creating a positive feedback loop that further amplifies the rally. Additionally, stagnation in ETF capital inflows has led to reduced market liquidity, increased volatility, and resonance with on-chain active funds, magnifying price fluctuations. The anticipation of the Glamsterdam upgrade (involving technical optimizations like ePBS) also prompted some funds to pre-position, providing medium-term support for the price.

Regarding risks, in the context of zero net ETF inflows, if on-chain activity declines, liquidity may further contract, risking a price pullback. If spot buying diminishes under negative funding rates, bearish sentiment could dominate again, increasing volatility. The specific progress of technical upgrades remains uncertain, and continuous monitoring of on-chain activity, open interest, and real-time funding rate changes is necessary.