Author: Marcel Pechman, Cointelegraph
Compiled by: Felix, PANews
Ethereum successfully implemented a critical network upgrade on May 7, but the price of ETH and its derivatives reacted tepidly to the upgrade. This lukewarm response surprised traders and led analysts to question whether ETH has a chance to rise 22% to reclaim the $2200 level.
ETH 30-day futures annualized premium. Source: Laevitas.ch
The ETH futures premium has remained below the 5% neutral threshold, indicating a lack of interest from leveraged bulls. More importantly, after the Pectra upgrade, this metric has remained unchanged at 3%, suggesting that despite the successful deployment of the upgrade, traders have not adjusted their positions.
The market's cold response is partly due to investors' focus on macroeconomic issues, as the uncertainty surrounding global trade disputes has heightened recession risks. However, traders' lack of interest in Ethereum predates the recent deterioration in risk aversion. In fact, in the first three months of 2025, ETH's performance lagged behind the overall cryptocurrency market capitalization by 28%.
This tepid response can be partly attributed to investors' focus on macroeconomic issues, as the uncertainty surrounding global trade disputes has heightened recession risks. However, the lack of interest from traders in ETH predates the recent escalation of risk aversion. In fact, in the first three months of 2025, ETH's performance lagged behind the overall cryptocurrency market capitalization by 28%.
The price performance following the Pectra upgrade has been lackluster, reflecting a general dissatisfaction in the market, as other blockchains have shown some momentum.
Comparison of Solana's monthly active addresses with L1 competitors. Source: Token Terminal
Historically, high base layer fees on Ethereum may have limited network activity, but these fees have dropped below $1 since mid-February. Furthermore, according to Token Terminal data, Ethereum's leading L2 solution Base currently has 10.3 million monthly active users, far fewer than Solana's 82.2 million and BNB Chain's 25.9 million.
Is Ethereum lagging in DApp interoperability — will this affect the price of ETH?
Solana dominates the DEX space by providing an integrated user experience, especially in token issuance. Similarly, Hyperliquid has exceeded expectations in perpetual contract trading, indicating that traders' main focus may not necessarily be on Ethereum's decentralization and security. Meanwhile, Tron has made significant progress in the stablecoin market.
Blockchain and DApps 30-day fees (USD). Source: DefiLlama
Ethereum still leads in total locked value (TVL) with a scale of $53.7 billion. However, this has not brought much benefit to ETH holders. According to DefiLlama data, Ethereum network fees have been relatively low in the past 30 days, at only $19 million. In contrast, Tron accumulated fees of $51.8 million during the same period, while Solana accumulated fees of $39.4 million.
Source: X/ProbablyNoam
Alchemy Engineering Director Noam Hurwitz pointed out that since the Pectra upgrade, Ethereum's blob fees have dropped to their lowest levels. For Hurwitz, ETH's success depends on the scalability of the underlying layer, including further improvements to the Rollup mechanism, as well as ultimately a more seamless user experience.
For a long time, asset and data interoperability within the Ethereum L2 ecosystem has been a challenge, while users on Solana and BNB Chain can easily switch between multiple decentralized applications (DApps). Although the Pectra upgrade has taken a step in the right direction, it has not resolved this issue, which also explains why ETH has failed to return to the $2200 level seen in early March.
To raise the price of ETH from the current $1810 by 22%, investors may need to ensure that the network's progress (whether through deposits or L2 growth) translates into tangible benefits. Ultimately, a higher staking yield or stronger incentives will be needed to drive broader adoption of DApps, which in turn will increase demand for ETH within the ecosystem.
Related: Conversation with the Ethereum Foundation: After the Pectra upgrade, detailing the three core strategies for the future
