1. Effects of hard fork upgrades
The Pectra upgrade (May 7, 2025) significantly enhances the efficiency and scalability of the Ethereum network by optimizing the validator mechanism, improving Layer 2 interoperability, and expanding blob capacity, directly driving the ETH price up by 19.6% to $2,230 within 24 hours.
The market's expectations for technical upgrades have been partially realized, but long-term ecological optimization (such as reducing gas fees to $0.01) will continue to attract developers and users.
2. Institutional capital trends
Institutions like BlackRock and Fidelity are heavily investing in ETH through spot ETFs, with a net inflow of $14.57 million in a single day, totaling over $2.66 billion in institutional capital inflows over three months, forming price support.
On-chain data shows that whale addresses have recently increased their holdings of ETH worth $140 million, and a reduction in circulating supply may exacerbate supply-demand imbalances.
3. Macroeconomics and market sentiment
The Trump administration's reduction of tariffs on the UK and Coinbase's acquisition of Deribit have boosted market confidence, causing the crypto fear and greed index to rise to 73 (greed zone), driving the overall cryptocurrency market up by 4.95%.
After Bitcoin breaks $100,000, capital rotates to ETH, with the ETH/BTC exchange rate expected to rise to 0.06, potentially bringing a 71% excess return.
Short-term can't beat, long-term let's go!
