Ethereum Pectra Upgrade Goes Live: Is a Price Rise Imminent? 

Pectra is the long-awaited upgrade to the Ethereum network. Now that it has arrived, a spike in the value of Ether may be on the way. We discuss it in the article below. 

On Wednesday morning, quietly and unannounced, the Ethereum network launched its long-awaited Pectra upgrade. This was a key part of its infrastructure that will allow Ethereum to compete with its up-and-coming competitors. Amongst its aims is to allow it to be faster and with lower costs.

The Pectra Upgrade

The upgrade features 11 Ethereum Improvement Proposals. These will improve staking efficiency, user experience, and validations. However, most crucial is that it will provide scalability. This will build upon the Dencun upgrade launched in March last year. It is also the groundwork for future upgrades.

Immediately after the upgrade was launched, very little was seen in the price. This tepid welcome was a surprise to many and made social media immediately question if Ethereum can regain the highs it once did above the $2,200 marker. A slow creep upwards then began, above its $1,800 resistance zone. The Ethereum price is now trading at around $1,937, up almost 7%, and it is heading towards the $2000 barrier.

Ethereum has been trying to catch up and compete with rival, newer blockchains. Its statistics also show how people have already migrated. Its base layer fees have limited network activity, despite being below $1 since mid-February. In addition, rival Solana has 82.2 million users on its layer 2 solution. Ethereum has just 10.3 million.

In fact, many believe Solana is beating it in more than one area. Other networks like Tron and Hyperliquid have also taken their market share, being havens for everything from stablecoins to finance. One advantage many of these have is their ability for user interoperability, allowing people to switch between decentralised apps. Even the Pectra upgrade does not allow Ethereum to do this, so many believe it still has a long way to go.

Pause in Deposits and Withdrawals

Many major exchanges paused deposits and withdrawals while the upgrade took place. Primarily, it was with tokens based on the network. Trading did continue though it was impossible to move money in or out. The idea of this was to prevent any loss from forks or reorganisation. This may have accounted for some of the lack of price movements, effectively stalling any initial impact it may have had.

When it comes to ETH futures, the upgrade has done little to make any movements. The premium remained below a 5% threshold. This is disappointing for Ethereum, as it follows a pattern that has remained over the last year, in which investor sentiment towards it has been lacklustre at best. This has been shown in the 28% underperformance in the first three months of the year compared to the rest of the crypto market.

Movement in Ethereum’s Price

Its real test was at the $1,850 mark. Once this was broken, then the possibility of a genuine bull run arrived, backed by the Pectra upgrade, buoying consumer sentiment. Should other positive factors influence this, perhaps a run of positive inflows into Ethereum ETFS, then it could easily break the $2000 mark.

If it does not manage to breach this next psychological level, then a further decline could be on the cards. Coupled with changing macroeconomic factors and renewed disinterest from investors, this could see it go as low as $1,750.

If Ethereum wants to regain its position at the head of the table, it needs to win back those it has lost to other networks. However, this should not just be within the crypto and Defi community. Renewed institutional adoption would be a key factor. At the moment, this tends to be measured via inflows to Ethereum ETFS. However, practical uses and applications in real-world scenarios would be just as good.

The network is becoming quieter. Thus, the world’s largest blockchain needs to attract back those who once used it. Should an increase in activity on the network take place, it could give traditional financial investors the market sentiment and the confidence it needs to bounce back. It may have already started.

Essentially, it needs to be a genuine rival for Bitcoin. Once, it was almost at the head of the table with it. Yet the main cryptocurrency has begun to pull away from the others. both in value and in consumer confidence.  This must change for Ethereum to continue its run.

Ethereum remains the leading blockchain, despite competition. It has the biggest total value locked at $53.7 billion. Yet its ecosystem is haemorrhaging, as users go elsewhere for a better experience. If further upgrades can rectify its issues, there is no reason the price would not skyrocket. Yet for the time being, it seems to be the point at which buy and hold are the best options.